Recapturing The Perrigo Advantage
Investor Day May 9, 2019
This information is confidential and was prepared by ACME Corp.; it is not to be relied on by any 3rd party without ACME's prior written consent Forward Looking Statements
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,” “forecast,” “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; resolution of uncertain tax positions, including the Company’s appeal of the Notice of Assessment (the “NoA”) issued by the Irish tax authority and the Notice of Proposed Assessment (“NOPA”) issued by the U.S. Internal Revenue Service and the impact that an adverse result in such proceedings would have on operating results, cash flows, and liquidity; potential third-party claims and litigation, including litigation relating to the Company’s restatement of previously-filed financial information and litigation relating to uncertain tax positions, including the NoA and the NOPA; potential impacts of ongoing or future government investigations and regulatory initiatives; the impact of 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 success of such transactions, 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 strategic and other initiatives. Statements regarding the separation of the RX business, including the expected benefits, anticipated timing, form of any such separation and whether the separation ultimately occurs, are all subject to various risks and uncertainties, including future financial and operating results, our ability to separate the business, the effect of existing interdependencies with our manufacturing and shared service operations, and the tax consequences of the planned separation to the Company or its shareholders. 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, 2018, 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 are 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.
2 Perrigo’s History, Current Situation, and Portfolio Reconfiguration Murray Kessler
Self-Care Market and What it Means for Perrigo Murray Kessler
Lessons Learned to Inform the Future Murray Kessler
Recapturing The Perrigo Advantage
Achieve Base Plan – International Svend Andersen
Achieve Base Plan and Invest in Repeatable Growth Platforms – Agenda Jeff Needham Americas
Invest in Repeatable Growth Platforms – Innovation Jim Dillard
Drive Organization Effectiveness and Fund Growth Sustainably Ron Janish
Capital Allocation and Deliver Consistent and Sustainable Results Ray Silcock
Summary Murray Kessler
Question and Answer
3 The Perrigo Company today
$4.7B $897M
Adjusted Revenue Operating Income
Note: 2018 financials 4 (1) See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures A company that originated the OTC category
Introduction of “private label”
Rx-to-OTC business begins Company focus shifts to Rx business with generic ibuprofen healthcare products established approval
1887 1921 1940 1980 1984 1997 2004 2015
Founded by Luther Quifa marks the beginning of Liquid bright-stock Omega Perrigo to package global acquisitions, which manufacturing begins acquisition and distribute continue into the 2000s patented medicines and household goods
5 And capitalized on multiple factors that helped the company grow
Aging population Growing category Value-seeking consumers Rx-to-OTC switches
Percentage of US population OTC category sales Store brand OTC penetration ~35 market switches over age 65 growth from 1992 - 2017 since 2000
External 1950 2016 1990 2016 8% 15% 3x 10% 33% First to market
Superior manufacturing Excellent customer Great talent base with a The Perrigo Formula and scale service high-level of continuity ~30% discount to NB at retail
Retailer margin higher than 5-10x SKU count vs. Maintained consistent Commitment to delivering NB ($ and %) Internal National Brands and high service levels quality products and services ~35% adjusted margin to Perrigo(1)
Note: Margin to Perrigo reflects FY2018 Adjusted Gross Margin; (1) CSCA specific adjusted margin; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures 6 Source: IRI Private Label Trends Report Q3 2018; US Census Bureau; UBS Q-Series Global Consumer Report July 11 2017; The Nielsen Company And grow we did for many years
$5B
$750M
7 Source: Capital IQ The market rewarded our growth
22.5x
Perrigo
S&P Consumer S&P Pharma ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15
Perrigo Forward 23.6x 17.6x 18.2x 20.6x 16.9x 18.8x 20.1x 18.6x 14.5x 18.7x 19.7x 20.1x 19.5x 21.3x 22.0x P / E
Note: Forward P/E ratio represents the ratio of share price to analyst consensus on estimated next twelve month EPS at such time and is not based on Perrigo results, either historical or prospective 8 Source: Capital IQ But since 2015, we have not grown
Forward P / E 22.0x 12.7x 15.2x 14.8x
Note: Revenue, CAGRs reflect constant currency and exclude exited businesses (VMS, API and certain CSCI distribution); 2015 includes annualized impact of Omega and other product acquisitions See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures; Forward P/E ratio represents the ratio of share price to analyst consensus on estimated next twelve month EPS 9 at such time and is not based on Perrigo results, either historical or prospective Source: Forward P/E-Capital IQ (figures before 2017 include Tysabri®); Perrigo Internal Data And the stock has suffered
$145 2015 $83 $87 2016 2017 $49 Today
Forward P / E 22.0x 12.7x 15.2x 11.5x
Note: Share price numbers displayed on graph shown reflect year end close of respective year, figures before 2017 include Tysabri® Forward P/E ratio represents the ratio of share price to analyst consensus on estimated next twelve month EPS at such time and is not based on Perrigo results, either historical or prospective 10 Source: Capital IQ; FactSet While above our internal plan and consensus, our Q1 results continue to reflect a challenged business
Consolidated Q1 Results Q1 Business Segment Results
CSCA Net Sales $1,174M (-1%*) • Net Sales: $582M (-3%*)
Adjusted • Adj OI: $106M (-21%*) Operating $203M (-17%*) Income CSCI • Net Sales: $351M (+2%*) Adjusted Diluted $1.07 • Adj OI: $54M (-8%*) EPS Rx Consensus • Net Sales: $242M (+2%*) EPS $0.93 • Adj OI: $82M (-3%*)
11 Note: Constant Currency Growth Metrics; *Compared to one year ago (Q1 2018); See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Source: FactSet; Perrigo data; Internal estimates But today we change that and begin the Perrigo Transformation to a consumer self-care company
1 Reconfigure the portfolio
7 2 Deliver consistent and Achieve base plan sustainable results
To make lives better by bringing Quality, Affordable 6 Self-Care Products™ that 3 Invest in repeatable Capital allocation consumers trust everywhere they are sold growth platforms
5 4 Drive organization Fund growth effectiveness and build sustainably capabilities
12 Our starting point is a 2019 projection for total Perrigo as it exists today
2018 Adjusted Diluted EPS(1) $4.55
Business performance (0.13)-0.17
Consumer Transformation Investments (0.29)
Rx Pipeline Investments (0.05)
Foreign Exchange (0.06)
Tax Rate Change (18 to 22.5%) (0.20)
Compensation plans back to 100% (0.17)
2018 Share buyback impact 0.06
Animal Health moved to ‘Held for Sale’ (0.06)
2019 Adjusted Diluted EPS Guidance $3.65-3.95
13 (1) See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures There is potential upside to our 2019 Adjusted Diluted EPS guidance
Upside factor 2019 Potential Impact
® Generic ProAir Approval + 0 - 20 cents (+10 cents per quarter) (not in current guidance)
Incremental Cost Savings Initiative + 0 - 5 cents
Accretion for Ranir Acquisition + 10 cents (assuming close during Q3)
Total + 10 -35 cents
14 2019 guidance does not include the impact of net dilution from exiting Rx
Rx Business Divestiture Process Update
• We are currently in the process of divesting our Rx business and are in active discussions with interested parties
• Net dilution from sale (estimated): $1.05-$1.15
• Net dilution from spin (estimated): $1.40-$1.50, which does not include the benefit to shareholders of equity in Spin Co
• Targeting late 2019 or 2020, depending on transaction
• If spin, we will provide a more detailed Rx strategic plan plus equity distribution
15 Even though Rx is performing well again, we remain committed to the separation to enable improved focus for both our Consumer and Rx businesses
Separation enables long-term value creation for shareholders
Strong ability to win in respective categories:
Greater emphasis on consumer marketing and innovation for Consumer
Science and Regulatory emphasis for Rx
Stronger customer execution
Increased investment in relevant capabilities
More focused organizations
16 Pivot to a consumer focused company designed to unlock significant value
Peer multiples Forward P / E
(1) (2) (3) today
Source: FactSet as of May 2, 2019 Forward P/E ratio represents the ratio of share price to analyst consensus on estimated next twelve month EPS as of May 2, 2019 and is not based on Perrigo results, either historical or prospective (1) Peers include Amneal, Endo, Mylan, and Teva (2) Reflects Perrigo WholeCo (3) Peers include Beiersdorf, Church & Dwight, The Clorox Company, Colgate-Palmolive, Edgewell, Helen of Troy, Kimberly-Clark, 17 Prestige Consumer Healthcare, Procter & Gamble, Reckitt Benckiser, B&G Foods, Lancaster Colony Corporation, TreeHouse Foods As announced, we are also selling our Animal Health business as this does not fit our self-care vision
Animal Health Business Divestiture Details Transaction Terms • $185M transaction value
Financial • Net cash proceeds of $185M to help fund Impact Ranir acquisition
• Animal Health business will be reported as Reporting Held for Sale starting in Q2 2019
18 After portfolio reconfiguration, Perrigo will be a $3.7B global consumer company with the opportunity for significant growth and value creation
Perrigo Adjusted Revenue: $3.7B Perrigo Adjusted Revenue: $3.7B
International National 38% brand ~34%
Americas Store brand 62% ~66%
Americas: $2.3B Store-Brand: $2.5B International: $1.4B National Brand: $1.2B
19 Note: Excludes Held for Sale business and announced Ranir acquisition; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Source: Perrigo Internal Data The New Perrigo is being built on a financially and operationally strong foundation
Global Market Financial Operational reach strength strength strength
Trusted Leadership in Strong operating manufacturing 30+ countries key categories cash flow and reliable supply chain
20 The New Perrigo consumer company
$3.7B $578M
Adjusted Adjusted Revenue Operating Income
21 Note: 2018 financials, Adjusted Revenue and Operating Income exclude Held for Sale businesses and announced Ranir acquisition; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Becoming a high-performing consumer company (3/5/7) is key to unlocking value
Perrigo Historical(1) CPG Peer Guidance Avg. (2015-2018) (2019E-2021E) Consumer adjusted revenue growth 0% 3% Consumer adjusted operating income growth -2% 5%
Adjusted EPS growth -7% 7%
Gross Leverage (2018) 3.3x 2.5x
Forward P / E* 11.5x 21.1x
Source: *FactSet as of May 2, 2019 and Perrigo internal figures, rounded Note: 0% revenue growth reflects constant currency and exclude exited businesses (VMS, API and certain CSCI distribution); 2015 includes annualized impact of Omega and other product acquisitions CPG peers include Beiersdorf, Church & Dwight, The Clorox Company, Colgate-Palmolive, Edgewell, Helen of Troy, Kimberly-Clark, Prestige Consumer Healthcare, Procter & Gamble, Reckitt Benckiser, B&G Foods, Lancaster Colony 22 Corporation, TreeHouse Foods; Forward P/E ratio represents the ratio of share price to analyst consensus on estimated next twelve month EPS as of May 2, 2019 and is not based on Perrigo results, either historical or prospective (1) See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Improving Perrigo’s Consumer Americas business is job #1
CSCA is majority Revenue growth And adjusted of adjusted has slowed gross margin operating income has declined 70% 0% -160 bps (2018) (’15 – ’18 CAGR) (’15 – ’18)
Note: Adjusted Operating Income excludes Corporate Unallocated costs; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures 23 0% revenue growth reflects constant currency and exclude exited businesses (VMS, API and certain CSCI distribution); 2015 includes annualized impact of Omega and other product acquisitions From 2009 to 2015, Perrigo Consumer Americas grew from three key sources, offsetting headwinds in the base business
2009 – 2015 Consumer Americas adjusted revenue growth: ~$940M (9% CAGR)
Acquisitions Rx-to-OTC Switches Innovation Base Business
63% 9% 42% -14%
$590M $90M $395M -$135M
We had The Perrigo Advantage!
24 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Excludes VMS business; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures This led to market leadership in our key categories
Cough, Cold Infant Formula Gastrointestinal
65% 90% 40% Perrigo store-brand market Analgesics Smoking Cessation share 70% 90%
25 Source: IRI MULO 2018 But since 2015, revenues have been flat as bolt-ons slowed and innovation has not offset leakage in the base business
2015 – 2018 Consumer Americas adjusted revenue growth: ~$20M (0% CAGR)
Acquisitions Rx-to-OTC Switches Innovation Base Business
$30M$105M $55M -$170M
Reduction in medium-large Three outsized switches (Flonase, Reduced output for R&D spend Continued headwinds acquisitions Nasacort, Nexium) account for 95%
Driving revenue growth is key to recapturing The Perrigo Advantage
26 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Excludes VMS business; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Despite the fact that the categories we compete in are still growing and on trend
Note: 2018 CSCA sales 27 Source: IRI MULO POS data (OTC - custom categories) OTC would be the largest category and store brand category overall if included in Goldman Sachs’ recent Brand Disruption report
Goldman Sachs – Brand Disruption Report (April 2019)
Category ’18 POS Sales ($B) SB share ’18 SB POS Sales ($B) OTC 26.0 29% 7.6 Cheese 18.7 39% 7.3 29% Meat and Seafood Frozen 11.3 40% 4.5 Frozen Vegetables 10.2 37% 3.8 Vitamins and Supplements 8.5 27% 2.3 Bath Tissue 8.8 24% 2.1 Dog Food (incl. treats) 10.3 15% 1.5 Store brand share of Cookies 8.1 17% 1.4 OTC MULO POS Sales Juices and Drink - Shelf Stable 8 14% 1.1 (2018) Dog Food 7.1 13% 0.9 Oral Hygiene 8.7 8% 0.7 RTE Cereal 8.3 7% 0.6 Potato Chip 7.9 7% 0.6 Yogurt 7.3 9% 0.6 2.7% Dinner and Entree Frozen 8.7 6% 0.5 Store brand OTC POS Confection 6.7 5% 0.4 MULO Growth Crackers 6.3 7% 0.4 Chocolate 13.8 2% 0.2 CAGR (’15 – ’18) Liquid laundry 8.1 2% 0.1
28 Source: IRI MULO POS data (OTC – selected categories); Brand Disruptions Next Phase – The Goldman Sachs Group, Inc. Conversely, Perrigo Consumer International is performing better than most analysts realize
Vitamins, Minerals, Cough/Cold/ Personal Care & Lifestyle & Dietary Anti-Parasite Allergy Dermatology Supplements
Key Brands
CSCI: $1.35B portfolio
29 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. International is poised for growth like the Americas; unlocking bigger opportunities is key
Cash out as a 22 10 4 percent of total (%)
# SKUs 15,000 10,000 5,000
# Countries 32 32 28 (excl. export)
# Employees (CSCI) 3,873 3,559 3,506
Core revenue NA -0.2% +2.5% growth Adj. Operating 11.6% 15.3% 16.3% margin (CSCI) Revenue from new 4.8% 5.5% 6.2% products 30 1Excludes Non-branded/Other net sales in the International Segment representing ~15% of the total net sales ; *Core excludes pruned products; See attached Appendix for reconciliation of adjusted (non- GAAP) to reported (GAAP) financial measures Takeaways
1 Perrigo is exiting Rx and Animal Health to become a consumer focused self-care company; separation enables focus and value creation from both
(1) 2 The New Perrigo will be a $3.7B global consumer company – building on our U.S. store brand core
3 To unlock superior shareholder value, New Perrigo must perform like a high-performing CPG company (3/5/7)
4 To do this, our first priority will be fixing the Consumer Americas business
Note: Excludes Held for Sale businesses and announced Ranir acquisition 31 (1) See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Perrigo’s History, Current Situation, and Portfolio Reconfiguration Murray Kessler
Self-Care Market and What it Means for Perrigo Murray Kessler
Lessons Learned to Inform the Future Murray Kessler
Recapturing The Perrigo Advantage
Achieve Base Plan – International Svend Andersen
Achieve Base Plan and Invest in Repeatable Growth Platforms – Agenda Jeff Needham Americas
Invest in Repeatable Growth Platforms – Innovation Jim Dillard
Drive Organization Effectiveness and Fund Growth Sustainably Ron Janish
Capital Allocation and Deliver Consistent and Sustainable Results Ray Silcock
Summary Murray Kessler
Question and Answer
32 Our new self-care vision is designed to open up significant growth for Perrigo globally
33 How our vision impacts our strategy
To make lives better • Social impact – gives our employees purpose and pride
By bringing • Emphasis on superior supply chain performance
Quality, affordable • Links us to our heritage and recognizes we are the value leader
Self-care • Gives us freedom to pursue big close-in adjacencies
Products • Defines us as a consumer products company, not a services company
• Places a huge responsibility on us to deliver safe, effective, and socially That consumers trust responsible products
• Plays to the expanding global nature of the company and challenges us Everywhere they are sold to capitalize on new and expanding channels
34 Why self-care?
A confluence of factors is driving the trend towards self-care
Rise of Millennials and empowered consumers focused on wellness
New technologies and changing retail dynamics
Rising healthcare costs
Perrigo is a self-care company
35 How we define Actions that individuals take to promote their health self-care and wellness to:
–Prevent or treat acute or chronic conditions that can be self-monitored and managed without the need for direct physician oversight
–Utilize products providing therapeutic benefits
–Actively pursue a lifestyle that allows individuals to stay free of disease
–Empower themselves to proactively direct their own care
36 Consumers are seeking to improve their lifestyle through self-care
Consumers want to be … and direct their own Across a spectrum of use And this behavior is active in their own care… treatment cases increasing
of consumers have increased Chronic/self-managed self-care ailments 33% behavior in the 88% 47% last year
Minor ailments increase in Google +250% searches for the of individuals see self-care as of Millennials make every effort Long-term conditions term “self-care” an important part of their lives to avoid visiting the doctor in the past 8 years
Acute conditions Apple’s App Store named self-care the breakout trend for 2018
Source: Self-care Roadmap Global Market Development Source: IRI, Taking Charge: Consumers Grabbing Hold Source: Self-care Roadmap Global Market Development Source: IRI, Taking Charge: Consumers Grabbing Hold Center of Their Health and Wellness Drives $450-Billion Center of Their Health and Wellness Drives $450-Billion Opportunity, November 2018 Opportunity, November 2018; Google search history
37 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Millennials are changing self-care expectations
Consumer preferences as a whole are changing to reflect Millennial priorities
A greater focus on health & fitness…
…supported by premium & bespoke products (especially in VMS and sports nutrition)…
…with natural active ingredients…
…at the best value (not just the lowest price)
38 Source: IRI Self-Care POV (Nov 2018); Nutraingredients-USA.com And are using new interactive technology platforms that are emerging to help support self-care
Remote consultation and diagnosis Remote diagnosis and medications Voice-activated at-home device to from a live dermatologist shipped right to consumer’s door manage wellness
39 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Retail has an opportunity to take a larger role in self-care
Consumers are seeking support outside the traditional healthcare market… …and they are open to retailers helping fill that void
Trust in Healthcare Declines Percentage/loyalty in the healthcare system (Change from 2017 – 2018) out of 10 consumers want retailers to be 9 more involved in their personal wellness
of consumers have visited a retail clinic 46% in the past year -9 -12 -2
Neutral Trust
40 Source: Self-Care roadmap Global Market Development Center Traditional retailers are adapting to play a larger role in self-care
41 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Self-care also helps offset rising healthcare costs
Healthcare costs are rising significantly Prevention minimizes costs
Annual healthcare expenditure per capita
$20K 4.8% CAGR
15 Every $1 spent on OTC meds 3.7% CAGR
10 Saves $7 for the U.S. healthcare 5 system
0 2011 2018E 2027P
42 Source: Centers for Medicare & Medicaid Services, Gallup research; Self-care roadmap Global Market Development Center Pursuing self-care is not a major change for Perrigo
We’re building on our roots And bringing our values and skills to more categories
To make lives better by bringing Perrigo’s commitment to quality, Quality, Affordable Self-Care affordable healthcare products Products™ that consumers trust everywhere they are sold.
Primarily treatments Treatments AND wellness
43 The New Perrigo already is a self-care company
Perrigo Self- categories care Allergy and sinus Feminine needs (e.g., Home health care/kits Skin care (medicated) lubricants)
Analgesics First aid treatment Health remedies (e.g., Sleeping remedies lice, ear care, wart)
Cough and cold Foot care products Infant nutrition Sun products (e.g., sunscreens, lotions)
Diagnostics (e.g., GI NRT Vitamins and herbals diabetes)
Drinks (e.g., liquid Hemorrhoid remedies Scar products Weight control supplements, nutrition)
While we are mostly focused on treatment products today – going forward, we have the opportunity to expand into wellness and prevention
44 And it is big business
We’re maintaining our focus on categories The opportunity is massive that fit • Self-care adjacencies must be attractive and growing
• Adjacencies must fit with our business strategy
• We only enter adjacencies where we have the $450B right to win
• We only enter when it meets the Perrigo formula
45 Source: IRI, Taking Charge: Consumers Grabbing Hold of Their Health and Wellness Drives $450-Billion Opportunity, November 2018 Our new vision opens up a number of significant close-in adjacencies where Perrigo has the right to win
Examples
Nutritional Probiotics Oral Care VMS CBD Drinks ~$3B ~$1B ~$8B ~$8B ~$2B 6.6% CAGR 9.5% CAGR 1.5% CAGR 3.9% CAGR (2022 projection) 50% CAGR 7.6% SB CAGR 10.9% SB CAGR 4.4% SB CAGR 3.9% SB CAGR
46 Note: Category growth calculated p.a. over ’15-’18; The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Source: IRI POS MULO data; Euromonitor; Haywood Securities Takeaways
1 Self-care is on-trend and here to stay, and the opportunity is massive
2 Perrigo already is a self-care company
3 Going forward, Perrigo will expand into wellness and prevention
47 Perrigo’s History, Current Situation, and Portfolio Reconfiguration Murray Kessler
Self-Care Market and What it Means for Perrigo Murray Kessler
Lessons Learned to Inform the Future Murray Kessler
Recapturing The Perrigo Advantage
Achieve Base Plan – International Svend Andersen
Achieve Base Plan and Invest in Repeatable Growth Platforms – Agenda Jeff Needham Americas
Invest in Repeatable Growth Platforms – Innovation Jim Dillard
Drive Organization Effectiveness and Fund Growth Sustainably Ron Janish
Capital Allocation and Deliver Consistent and Sustainable Results Ray Silcock
Summary Murray Kessler
Question and Answer
48 Lessons learned from our history inform how we will capitalize on the self-care opportunity
1• Perrigo has and will continue to face headwinds; more emphasis on innovation will offset this pressure
2• Perrigo has and can successfully participate in close-in adjacent profit pools through organic entry and bolt-on acquisitions to accelerate growth
3• The breadth of our product portfolio will continue to be a competitive advantage; we will simplify the organization to truly recapture The Perrigo Advantage
4• In this new environment, capabilities will be added and investments will be made in order to take advantage of lessons learned
49 LESSON #1: KEY INSIGHTS:
Recent innovation has not sufficiently offset market headwinds
Perrigo has and will continue to face headwinds; more But Perrigo knows how to drive growth through innovation emphasis on innovation will offset this pressure We must and will invest in innovation to drive new growth vectors, both in the Americas and Internationally
50 As stated, recent innovation has not sufficiently offset market headwinds
Recognized as a leading innovator just a few years ago… ..but that innovation is no longer outpacing headwinds
From 2009-2015 we covered headwinds by 150%
Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the items pictured on this slide are the property of their respective owners. 51 Source: Forbes; Perrigo Internal Data But Perrigo knows how to drive growth through innovation
Line Extensions/Value Adds Rx-to-OTC Switches Strong Int’l Consumer Brands
NRT mini mint Omeprazole Flonase Allegra XLS Physiomer lozenges ODT
Prevacid Solpadeine
Minoxidil men’s foam
NRT cherry Omeprazole Nexium Nasacort ACO Davitamon lozenges wildberry 2018 Revenue: ~$140M 2018 Revenue: ~$160M 2018 Revenue: ~$280M (displayed products) (displayed products) (displayed products)
52 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Source: Perrigo Internal Data It’s not a question of funding, it’s a question of yield
But declining opportunity in our base business is We have continued to invest in R&D reducing yields
Consumer Americas OTC R&D spend (as % of net sales) 4%
2010 - 2012 2013 - 2015 2016 - 2018
53 Source: Perrigo Internal Data Which will be addressed by opening new vectors of innovation beyond what has worked in the past
Traditional innovation path Additional paths
Perrigo National Joint Ventures and Brand Better Monographs Licensing (Naturals)
ANDAs ‘Across the ocean’ Perrigo led switches innovation
To achieve this, we will maintain our robust ~$130M in global R&D spend for 2019
54 Source: Perrigo Internal Data And increased marketing support in 2019 for organic innovation by $25M New Innovation
CSCA ANDAs and Monographs: CSCI Branded Innovation: Invest to Win:
CSCA and CSCI innovation supported by media advertising spend
55 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. LESSON #2: KEY INSIGHTS:
Adjacencies have been a growth accelerator in the past Perrigo has and can successfully participate in NRT (organic) and infant formula (bolt-on) are two examples of this and close-in adjacent profit pools still represent significant growth potential through organic entry and bolt-on acquisitions to accelerate growth Perrigo should and will pursue additional adjacencies going forward
56 Adjacencies have been a growth accelerator in the past
We pursued adjacencies across multiple vectors This helped us win
• Adjacencies are a proven and repeatable model
• We have been able to enter adjacencies both organically and inorganically New categories Proprietary products New price point (NRT and Formula) (ODT) (Premium branded) • Adjacencies can accelerate growth in the core business
New geography New channel New technologies (Mexico) (eCommerce) (Foams)
57 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Organic launch example – we successfully entered NRT via partnership
2018 revenue: ~$290M CAGR (’10 – ’18): 8.6%
• Entered partnership agreement in 2005
• We created the store brand market, and today have 90% share of store brand and ~55% of total category
• Launched first store brand version of the Nicorette Mini Lozenge in 2013
• We have also innovated outside of national brand guardrails with new flavors
58 Source: Perrigo Internal Data NRT is an organic platform that we have grown, but still has lots of running room
We have experience growing We are currently evaluating new formulations, flavors, and delivery categories with new formulations to break paradigms and offset new competition NRT Lozenge Example Suspensions / liquids $95B • 70%+ of growth came from new variants Chewables • Demonstrated consumer demand Smoking US Revenue for variations of core Orally dissolving tablets products
• The pipeline is full, Topicals with new ideas tested $1B and validated with research Vapor NRT US Revenue NRT lozenge net sales
59 Source: Perrigo Internal Data; IRI POS data New channel example – we have seen significant growth in our eCommerce business and have only scratched the surface
Perrigo’s eCommerce sales have grown tremendously Perrigo launched Basic Care® on Amazon in 2017 CSCA eCommerce net sales
CAGR: ~30%
2014 2018
60 The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Source: Perrigo Internal Data Bolt-on example – we entered infant formula inorganically and continuously grew it until the business became capacity constrained
2018 revenue: ~$350M CAGR (’14 – ’18): 6.2%
• Acquired business in 2010 for $808M • Enabled entry into an adjacent category • Capacity utilization at 85%+ since 2017
61 Source: Perrigo Internal Data We are investing $200M+ in capacity over the next 4 years to open up significant infant formula growth opportunities, plus another $50M in tablet capacity
Investments will unlock significant sales growth We’re investing in critical areas
1 Incremental drying and packaging capacity
2 New facility and dryer/process train
3 Secure external formula supply to bridge gap
62 As announced this morning, Perrigo is acquiring Ranir, the leading global supplier of private label oral self-care products, for $750M
We’re entering the Oral Self-Care category It fits with our formula
Oral Care • Attractive and growing category Ranir’s Category Store Brand CAGR 7.6% • Global reach and presence
• Fits with our self-care business strategy and private label model
• Right to win based on our strong history of store brand excellence
63 Note: Category growth calculated p.a. over ’15-’18 in MULO; The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Source: IRI POS data Ranir is the store brand market leader in a large, attractive, and adjacent self-care category and offers serious growth potential
Strong 2018 sales Significant US runway High growth International presence
$287M 7.5% ~9% ~30%
Ranir’s categories Sales outside Net sales Net sales growth store brand penetration the Americas (2018) (2014-2018 CAGR) (2018) (2018)
64 Source: Perrigo and Ranir Internal Data; IRI LESSON #3: KEY INSIGHTS:
The store brand advantage: We offer and manage a wider assortment of The breadth of our product SKUs than our national brand counterparts portfolio will continue to be a competitive advantage; we Internationally, we offer a wide array of local hero brands will simplify the organization to truly recapture The Perrigo Advantage The ability to handle this product complexity is a competitive advantage
There is significant opportunity to simplify the organization
65 The Perrigo Advantage: A full array of products and services
R&D and Regulatory Quality Sourcing and Mfg. Efficiency • Experienced player in the OTC • High quality products across a • Global sourcing and space variety of product segments manufacturing • Market leadership in FDA • High supplier quality standards • Mass customization model approvals • Capabilities across almost all OTC • Strong product innovation dosage forms
Distribution and Service Sales and Marketing • High volumes drive economies of • Robust portfolio scale • Sales expertise in OTC SB • Central distribution model segments • Historically high service levels • Late stage differentiation is a core competency
66 In fact, Perrigo’s ability to handle product complexity is a significant competitive advantage
26 Manufacturing & Packaging Facilities
~49 Billion Solid Doses/Year
~17 Billion Liquid Doses/Year
~3,000 Formulations
~13,000 SKUs
Dosage Forms
Tablets Liquids Creams/ointments Capsules Powders Gums Suspensions Insert Ron Lozenges Janish data Nasal Sprays
67 Our customers value our broad portfolio, and it must be fully leveraged
“We value suppliers who can innovate beyond national brands; we also like to offer exclusive SKUs as a competitive advantage.” Buyer, Drug Chain
“Grocers have fewer resources dedicated to merchandizing OTC; a supplier who can provide a broad variety of products will be able to influence which products hit the shelves.” Buyer, Grocery Chain
“Demonstrating the value of store brand via larger count SKUs is key; consumers really understand that value proposition if the product is larger and less expensive.” Buyer, Mass Merchandise Chain
68 Source: Customer interviews We have a wide array of ‘local hero’ brands in Europe, which also provides a competitive advantage
#1 Cough/Cold/Allergy #1 Personal Care ~225 total #1 Anti-Parasite brands POL/IT/NOR/NL/BE/ FR SWE/GRE/SP/POR/SW
#1 Dermatology SWE/NOR/UK/FR/IT/SP/ POR/CEE/TUR #1 Weight Loss #1 Cough/Cold/Allergy
SW/NOR FR/IT/BE/UK/SP/NOR/NL BE/IT/GRE #1 Anti-Parasite #1 VMS #2 VMS #3 Lifestyle
Netherlands UK/IR/FR/POL/BE UK/SP/NL NL/SP/POR Germany
69 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. There is opportunity to better manage our inherent complexity
Technology Countries Key capabilities
30+ 37+ Decentralized ERPs
70 Improvements to Supply Chain represent real money, which can and will be recaptured along with Project Momentum ($100M+ cost savings over 3 years)
Missed business, lost revenue, service-related fines
$40M+ Annualized Value
We must bring back this value by recapturing our advantage
71 LESSON #4: KEY INSIGHTS:
To accommodate growth, Perrigo must invest to improve our capabilities and technologies In this new environment, capabilities will be added and investments will be We also need to make up for delayed investment in key enablers of our made in order to take business advantage of lessons learned
72 We identified areas of investment needed which are being addressed to recapture The Perrigo Advantage
Siloed R&D, Purchasing, and Need for holistic business Limited consumer focused “CPG” innovation capabilities intelligence to mine financial marketing with minimal and consumer insights research investment
73 We now have the team in place – ~40%+ new or new in position
President & Chief Executive Officer*
Chief Chief Human Chief Chief Financial Chief Scientific General Transformation Chief Medical President CSCI President CSCA President Rx Information Resources SVP Innovation* Officer* Officer* Counsel Officer, Ops & Officer Officer Officer Supply Chain
SVP & VP Assistant Sr Director Associate Chief Business SVP CSCA Director IT VP Scientific Sr Director VP Growth & CFO Corporate Affairs & Quality, General Business CSCO Global Director Officer Sales Security CSCI HR Controller Nutrition* Counsel Intelligence* Patient Safety Innovation*
VP Rx VP Corporate Sr Director Senior Director Sr Director SVP Associate VP eCommerce/ SVP CSCA Operations & Treasurer & Commercial New Product CSCA & Supply VP Legal Transformation Director Global GM Netherlands OTC Business Corporate Solutions & Supply Chain Development Services Innovation Chain HR Office Patient Safety
VP Sales SVP & GM VP Global VP Global VP US CSC Director HR SVP Global VP Corporate Corporate & VP Legal Excellence Infant Nutrition Internal Audit Applications R&D Global Functions Procurement* Quality
VP Global Head of VP Legal Global VP & GM VP Commercial VP Global SVP Global Sr. Director Investor VP Quality Diversity & Labor & France Operations Infrastructure Operations Clinical Affairs Relations Inclusion Employment
Director – VP CSCA Sr. Director, VP Global Total VP CSCI Head of Call VP GM DACH* eCommerce VP Tax Regulatory VP Legal, Rx Commercial Office of CIO Rewards Operations Center Strategy & Op* Affairs VP Talent Sr Director VP Consumer Head of Corporate Director Stage VP & MD PUK Social Management & Compliance & Insights Gate Responsibility HR Technology Privacy
VP Global Sr Director Sr Director VP & General VP International Talent Compliance & Transformation Director Mexico Quality Acquisition Privacy
VP CSCI Project Manager VP Customer Regulatory CSCI Supply Chain New in Role Affairs *External Hire Sr Director Sr. Director CSCI Business CSCI R&D Development 74 Ranir leadership will further strengthen the team A good example – investing in Business Intelligence to match our CPG peers
Assessment of Business Intelligence Capabilities
“Analytically Impaired” “Analytical Nirvana”
75 Source: Adapted from Competing on Analytics by Davenport and Harris & the International Institute of Analytics with an external assessment of Perrigo’s business intelligence capabilities We are investing $5M+ in key enablers of our business
We are investing in key business enablers And have hired key leadership to support
Formation of master data repository Joe Nuzzolo VP Growth and Integration of our global ERPs Business Intelligence Hired: 11/18
Ensuring we have the right organization capabilities (e.g., SI&OP)
76 Takeaways – Perrigo is committing over $1 Billion starting in 2019 for acquisitions and organic growth
1 Ramping up innovation on the core
Expanding adjacently – with focus on Oral Health, Nutrition, NRT, Naturals, 2 and CBD
3 Ranir acquisition provides both immediate and sustained growth
4 Streamlining our organization
5 Investing in capacity, technology, and capabilities
77 The plan to recapture The Perrigo Advantage is in place
• Sale or spin of Rx and sale of Animal Health 1 focuses Perrigo on self-care Reconfigure the portfolio • Investing $200M+ in base plan to 7 2 Infant Nutrition and $50M to tablet • Plan to perform in line Deliver capacity, plus launching new with consumer peers consistent and Achieve base plan sustainable results products To make lives better by • Significant bolt-on acquisition; bringing Quality, investment in new technology Affordable Self-Care 6 3 and a licensing agreement to • Rx and Animal Health Products™ that Invest in repeatable Capital allocation enter Naturals proceeds and cash consumers trust growth platforms on hand to be everywhere they are sold • $25M in marketing for future redeployed brand launches
5 4 Drive organization • New (40%+) highly seasoned team Fund growth • $100M+ cost savings plan effectiveness and sustainably build capabilities • Established Transformation Office, centralized R&D, Purchasing, and Quality; created Innovation team
78 We estimate 2-3 years to fully transform Perrigo into a high-performing consumer company
Longer term we expect to perform in line Our transformation will allow us to deliver outsized growth at first with our peers
EPS ($)
Long Term Rx +40% Growth Targets 3% Revenue New Perrigo 5% Adj. OI New Perrigo 7% Adj. EPS
2019 Guidance Transformation (2-3 years) Post Transformation (3+ years)
79 Note: Rx dilution estimate assumes midpoint of sale scenario The New Perrigo will
Make lives better by bringing Quality, Affordable Self-Care Products™ that consumers trust everywhere they are sold
80 Perrigo’s History, Current Situation, and Portfolio Reconfiguration Murray Kessler
Self-Care Market and What it Means for Perrigo Murray Kessler
Lessons Learned to Inform the Future Murray Kessler
Recapturing The Perrigo Advantage
Achieve Base Plan – International Svend Andersen
Achieve Base Plan and Invest in Repeatable Growth Platforms – Agenda Jeff Needham Americas
Invest in Repeatable Growth Platforms – Innovation Jim Dillard
Drive Organization Effectiveness and Fund Growth Sustainably Ron Janish
Capital Allocation and Deliver Consistent and Sustainable Results Ray Silcock
Summary Murray Kessler
Question and Answer
81 Achieve base plan – Consumer Self-Care International (CSCI)
1 Reconfigure the portfolio Svend 7 2 Deliver consistent Andersen and sustainable Achieve base plan results To make lives better by bringing Quality, Affordable Self-Care 6 3 Products™ that Invest in repeatable Capital allocation consumers trust growth platforms everywhere they are sold EVP and 5 4 Drive organization Fund growth President, CSCI effectiveness and sustainably build capabilities
82 CSCI Snapshot
Sales and • $1.35B(1) in revenue, 80% is Core* brands growth • Core* brand revenue growth of 2.5% in 2018 • Total Market Growth outlook of ~2.0%
Footprint • >225 brands sold via 28 Subsidiary Countries, 95% in Europe and • 3,500 Employees, 7 manufacturing sites distribution • >1,100 Sales & Marketing/Digital employees • >125,000 strong customer partnerships (pharmacists), 80% weighted distribution • eCommerce >5%, double digit growth • >5% of revenue from innovation (new products)
83 *Core excludes pruned products; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures (1) Based on 2019 guidance CSCI has a pan-European footprint: Organized in clusters with distinct Centers of Excellence
IMS OTC Country Competitor Rank* eCommerce Northern Europe 1-10 . Sweden Marketing, . Finland 11-20 Digital . Norway Investment . Estonia 20+ in Centers of . Latvia Excellence . Sales Force & Lithuania Key Account Management
DACH Innovation . Germany . Switzerland . Austria UK & IRE . United Kingdom . Ireland Central Eastern Europe – CEE . Australia . International . Greece . Romania . Czech Rep. . Hungary Individual Countries . Slovenia . Slovakia . France . Ukraine Southern Europe . Poland . Bulgaria . Belgium . Italy . Netherlands . Turkey . Portugal 84 Note: *Ranking based on 2017 OTC IMS numbers . Spain In Europe we are outgrowing the market (3.3% vs 2.6%)
Total EU OTC Sales MAT 2018 ($M USD) Growth Rate MAT 2018/ 2017 – % Share (%)
1 1,869 2.6% 5.2
2 1,823 0.1% 5.1
3 1,558 -2.4% 4.3
4 1,326 1.5% 3.7
5 1,214 3.4% 3.4
6 833 5.3% 2.3
7 661 3.0% 1.8
8 652 0.1% 1.8
9 622 3.3% 1.7
10 602 0.7% 1.7
85 Source: Nicholas Hall, OTC Sell-Out Data subset without personal care ++, covering less than 50% of Perrigo’s branded portfolio Our strategic operating model enables profitable growth
‘Core Brands’ Consumer Centric Superior Channel Strategy Innovation & Marketing Execution
86 CSCI branded growth categories “Wellness, Prevention, Naturals, Lifestyle, Discrete”
Focus Categories Exposure to Growth >95% of Sales are in Europe Cough, Cold & Allergy, Analgesics
Lifestyle & Lifestyle & Diseases Couch, Cold & Diseases Allergy, 21% Analgesics Personal Care & 25% Derma-therapeutics VMS & Natural Health VMS & Natural 8% Health Strategic Niches Personal Care & + Other local Derma- Strategic Niches + brands therapeutics Other local brands 28% 18%
87 Our core brands are playing in the most relevant categories and are well positioned to capture trends – wellness, natural, and prevention
Cough, Cold & Personal Care & Lifestyle & VMS & Natural Strategic Niches + Allergy, Derma- Diseases Health Others local brands Analgesics therapeutics (anti-parasite example) #1 #1 #1 #1 #1 Market France FR/IT/BE/UK/SP/NOR/NL SW/NOR Netherlands SWE/NOR/UK/FR/IT/SP/ Position POR/NOR/CEE/TUR #1 #3 #1 #2 #1 POL/IT//NOR/NL/BE/ BE/IT/GRE UK/IR/FR/POL/BE SWE/GRE/SP/POR/ UK/SP/NL NL/SP/POR SW Germany
Key Brands
Portfolio 25% 21% 18% 8% 28% Composition Wellness Prevention Natural
88 More than two thirds of the portfolio is positioned against wellness, natural, and prevention needs Note: Ranking position in multiple countries is calculated using the weighted average ranking position by net sales; TTM Net Sales for CSCI Our Consumer Centric Innovation & Marketing New product development capitalizing on brand portfolio and channel execution with superior medical claims backed by regulatory registrations and robust consumer research
89 Our Innovation team is focused on satisfying consumer needs with a full pipeline – in-house & open innovation
PLUG & PLAY OF HERO SKUs SMART BRAND STRETCHES
SUPERIOR TECHNOLOGY, STRONGER CLAIMS CONDUCT CLINICAL STUDIES
NATURAL ALTERNATIVES TO OTC DREAM BIGGER
90 Our intensive TV / Digital advertising campaigns are driving core brands
91 Our superior Channel Execution Scale of infrastructure and agility to provide personalized consumer experiences
Offering self-care solutions fit for each consumers’ individual need
92 Our superior channel execution through targeted channel strategies
Drug Stores / Pharmacy eCommerce Para-pharmacies
Embracing the rapid growth opportunity Enhanced sales force execution tactics targeting selected pharmacies Extending key account Continuing to meet consumers where they management purchase self-care products; lifestyle >125,000 Strong categories are a focus customer partnerships
93 Key growth brand case studies
NiQuitin was under nurtured… …and is showing strong growth
. EU Challenger #3 gaining share . Real user testimonial marketing
+14,7% CAGR
Perrigo Consumption LTM16 LTM17 LTM18 11.9% 13.1% 14.3% Market Share
Physiomer 100% seawater … … is a leading brand in nasal hygiene in Europe
. Strong innovation with roll-out into new markets and adjacent category expansion plans +9.4% CAGR
Perrigo Consumption LTM16 LTM17 LTM18 11.1% 11.1% 11.9% Market Share 94 Key growth brand case studies
Aco first launched in 1939… …Perrigo relaunched its 250 SKUs in 2015 which reinvigorated the brand
. #1 Nordic household skincare brand . Brand stretching into all derma categories
+17.3% CAGR
LTM16 LTM17 LTM18 19.6% 21.6% 23.4% Market Share
Coldrex keeps gaining share… …through innovation and new marketing campaigns
. Adjacent category expansion . Central Eastern European play
+12,5% CAGR
Perrigo Consumption LTM16 LTM17 LTM18 6.8% 7% 7.6% Market Share 95 CSCI well positioned for growth
Strong Focused Brand Consumer Superior Sales Geographic Building Centric Execution Presence Innovation with Strong Regulatory Capabilities Expansive commercial Combining evidence Experienced R&D with >125,000 Strong European footprint based products with open innovation supported customer partnerships Local market expertise strong brand by regulatory capabilities (pharmacists) with communication across our region coupled with effective sales strategies
96 These pillars play a strong role in 2019 execution
Strong Focused Brand Superior Sales Geographic Innovation Building Execution Presence • ~1-2% Growth vs 2018* • 90% A&P against • $80M of new product • >5% eCommerce core brands launches in 2019 share with double digit growth • Core outgrowing the market • Improved weighted distribution based on targeting and segmentation optimization
97 Note: *Based upon 2019 guidance on constant currency basis Takeaways – Achieve base plan – Consumer Self-Care International
1 CSCI is a growing, branded self-care business with solid long-term growth prospects
We meet the self-care needs of consumers by driving our ‘core-brands’ 2 strategies throughout Europe with our established network relationships
We have a powerful strategy to drive our ‘Right to Win’, leveraging our 3 unique innovation & marketing model through our proven track record
98 Achieve base plan – Consumer Self-Care Americas (CSCA)
1 Reconfigure the portfolio Jeff Needham 7 Deliver consistent 2 and sustainable Achieve base plan results To make lives better by bringing Quality, Affordable Self-Care 6 3 Products™ that Invest in repeatable Capital allocation consumers trust growth platforms everywhere they are sold EVP and President, CSCA 5 4 Drive organization Fund growth effectiveness and sustainably build capabilities
99 CSCA Snapshot
Sales and • $2.34B in revenue* growth • 2018 volume growth of 3.4%(1) • Attractive categories, growing at ~2-3% annually
Footprint • 7,500 SKUs, 1,300 Products and • 5,500 employees, 15 manufacturing sites distribution • 80,000 points of distribution • 120 customer brands • eCommerce is ~2% of Revenue; growing at 4 Year CAGR of 30%
Note: *Based upon 2019 guidance on constant currency basis 100 (1) Excludes Animal Health We are a top 5 company in the consumer self-care space today and we are poised to outpace category growth
A Broad Portfolio Differentiating Capabilities Strong Partnerships
Diabetes 2% • Commercialization support for Other OTC store brands Cough, 8% GI Cold 19% 10% • Ability to “mass-customize”
Allergy, Sinus 12% Nutrition • Strategic relationships with 18% retail and wholesale customers NRT 15% Analgesics 17% • Market share that supports launch of new products and segments
101 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the items pictured on this slide are the property of their respective owners. Our 2019 focus is on improving store brand penetration, growing market share, and investing in innovation for future growth
Consumer Self-Care Americas Priorities
Expand store Drive Perrigo’s Develop Drive growth in Invest in critical brand market share innovation new channels infrastructure penetration growth in store that leapfrogs to capitalize on in key brand National Brands growth opportunities categories (‘NBB’)
102 Perrigo is the leading self-care store brand company today; there is still significant room to grow
We compete in growing …with room for additional store …within existing categories we have categories… brand penetration runway in gaining share of store brand
SB categories are growing faster than overall CPG We’ve proven the ability to drive high SB penetration We are growing our fair share in existing products
Average SB category growth 62% 52% 3.1% (2014-2018 US MULO POS) NRT 1 PPI’s 1
2
However, significant runway remains in a Whitespace opportunities for growth CPG average number of self-care segments 1.6% category growth eg: (2014-2018 US MULO POS) 29% 1 CCAS $276M
Note: (1) IRI rolling 12 month dollar share ending Dec 2018; (2) Perrigo market share of SB calculated as volume share of only comparable products Perrigo sells at MULO customers only 103 Source: IRI MULO POS data (OTC – selected categories) Penetration: We are driving penetration growth in our key categories, targeting $70M in 2019
We have a number examples of winning Each point of penetration is valuable penetration Perrigo runway
Outperforming National Brands Our Omeprazole supplanted branded Prilosec® at leading retailer
Leading store brand supplier $74M Capitalized on leading Store Brand position to capture new sales of infant formula
Leading store brand innovator Value of 1 percentage point Launched innovative Omeprazole of penetration to Perrigo1 ODT dosage form for Store Brand market in 2018
¹Calculated using IRI rolling 12 month category dollar share totals and assumed Perrigo’s portion of the market 104 Source: 2018 IRI MULO Share: We are gaining share in our categories, targeting $40M in 2019
We have a number of tactics that have resulted There is meaningful opportunity to in critical wins expand our share
Strong partnerships with retailers Co-developed exclusive organic infant formula product
Creating preferred product $18M Demonstrated strong consumer product preference to win share in NRT
Store brand merchandising capabilities Value of 1 percentage point Successful marketing events of share to Perrigo1 centered on innovative forms have driven share in GI
105 1Calculated using volume share of only comparable products Perrigo sells at MULO customers only Innovation: We expect to generate $45M+ of revenue in 2019 from new products
We have products to meet National Brand Equivalent (NBE) offerings, but we also go beyond, National Brand Better (NBB)
106 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Capabilities: We’re focused on building capabilities in new channels
Drive eCommerce growth by investing & Expand presence in the Expand presence in the building digital marketing capabilities Convenience store channel Reimbursed Markets channel
107 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the items pictured on this slide are the property of their respective owners. Capabilities: Driving eCommerce growth is a top priority in 2019, with plans to exceed $60M in 2019 revenue
We have been growing Amazon sales 87% 450+
2018 YoY SB growth SKUs by Q3 2019
We have been growing all retailer brands online 26% 2,300+
2018 Total YoY SB growth Total SKUs online
Capability building will 2019 eCommerce lead to further growth 47% plan growth
108 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Infrastructure: We’re investing in growth to capitalize on market demand; this is critical since we’ve been capacity constrained
Infant Nutrition Tablet Capacity $200M $50M OVER 4 YEARS OVER 2 YEARS
Will enable us to drive $100M+ in annualized Will enable us to: revenue due to: • Better manage “surge” demand and • Expanded U.S. store brand share growth enable more customer promotions • Meaningful expansion of non-US • Satisfy increasing retailer demands and presence expectations of supply dependability • Creation of new formulas • Expand flexibility to enable multiple work centers for high-volume items • Allow us to grow store brand penetration and drive Perrigo share
109 Takeaways – Achieve 2019 base plan – Consumer Self-Care Americas
1 We have initiatives in place to drive base business growth in 2019
2 While we strive for larger initiatives, new products will still generate $45M+ in revenue in 2019
3 We’re driving new channels, with eCommerce expected to exceed $60M
4 We’re investing $250M in critical capacity needs to drive significant future growth
110 Repeatable growth platforms
1 Reconfigure the portfolio
7 2 Deliver consistent To make lives and sustainable Achieve base plan results better by bringing Quality, Affordable Self- 6 Care Products™ 3 Invest in repeatable Capital allocation that consumers growth platforms trust everywhere they are sold
5 4 Drive organization Fund growth effectiveness and sustainably build capabilities
111 We are excited for Ranir to join the Perrigo family, re-igniting bolt-ons as an enabler to expand into adjacent categories
Product offerings In high growth segments
Bleach/ Dental Power Floss whitening accessories toothbrushes
Toothpaste Manual Nasal strips Cold sore toothbrushes medication
112 Note: 2014-2018 US MULO POS sales growth Source: IRI Ranir fits our model for bolt-on self-care adjacencies
Significant store brand Self-care focused categories Significant customer sharing that presence that leverages our that are a natural extension of can ease integration and existing capabilities our current portfolio generate operational synergies
In addition, similar cultures, value systems, and geographic proximity make for easier integration
113 Ranir is the global market leader in oral care and fits well with Perrigo’s position as a self-care market leader
Global market • #1 store brand position in oral care 1 leadership • Go-to partner for delivering the best value, quality, and service
• Retail-centric focus and expertise to deliver the customized products / solutions Retailer retailers seek for their customers 2 focused • Supporting continued shift away from national brands to deliver value to retailers and quality to consumers
• Organic growth for top and bottom line with plans to accelerate growth over next Strong five years – growing 3-4x faster than the overall oral care category 3 growth • Capture identified global whitespace by leveraging scale and deliver a comprehensive product range to customers
• Evolving through innovation in customized new products and solutions in existing Ideal and adjacent categories, as well as disciplined acquisitions 4 platform • Global infrastructure and scale
114 Like Perrigo, Ranir has a number of core capabilities that enable a competitive advantage
Key retailer needs Ranir’s ability to capitalize
• Build value-added relationships with suppliers across all functions Service Unmatched customer service • 98% fill rate
• Include claim of comparison to equivalent national brand on NBE/NBB products with quality at parity to national Quality packaging brands • 30 global professionals dedicated to best-in-class quality • Utilize proprietary and syndicated consumer data to develop Product Customized solutions and execution solutions Development • 45+ associates drive global innovation • Leverage expertise in product engineering and formulation with Flexibility Flexibility of suppliers for late stage customization global innovation team • 5 R&D laboratories across the globe
• Fill price needs that national brands cannot Sourcing Strategic sourcing to reduce cost • $5B+ individual oral care products provided
• Offer a comprehensive portfolio of leading oral care solutions Variety Unrivaled assortment meeting the specific needs and values of shoppers • 300+ unique oral care products
115 Ranir adds to Perrigo’s winning model
At the forefront of Driving growth beyond Global platform that will Critical partner to retailers self-care and prevention national brands with continue to seamlessly with best-in-class megatrends highly customized expand across all innovation capabilities solutions markets and channels across categories
116 A global, leading self-care platform We also see natural and organic self-care as an attractive, growing market; many consumers are willing to pay more
… and consumers who “live a Naturals is a large and growing market… natural lifestyle” will spend more
$20B+ 6% 40%
of adults “don’t Naturals market size Annual growth mind paying (2018) (’15 – ’18 CAGR) extra money to maintain a natural lifestyle”
117 Source: NBJ Channel Sales 2015-2018, Mintel – Natural and Organic Personal Care Consumer – US, December 2018 Marketing & consumer trends demonstrate a continued market need for natural self-care consumer products
5x 60% 44%
OTC Natural market growth vs Consumers worried about Consumers confused by what total OTC harmful ingredients “natural” means and seeking a brand to break-through the clutter 6.9x 72%
Kids Natural/Organic Nutrition Increase in new launches since 2011 growth rate vs total Kids Nutrition
118 Source: Kline Research, 2019; Mintel, 2018; MarketResearch.com, 2018 Licensing agreement just signed with a leading global “natural” brand allows Perrigo to launch a line of natural consumer wellness products
• A new strategic licensing partnership
• 88% Brand Awareness
•Aleading Natural Personal Care brand
• Reputation for hero ingredient profile and superior natural formulas
• Invest and Innovate: Successful Perrigo products developed for and deployed under a leading natural brand
• The opportunity: Enables entry into specific consumer categories where natural products are preferred
119 Also to drive growth, Perrigo is challenging its historical reliance on national brands to initiate Rx-to-OTC switches
Historical Rx-to-OTC switches
120 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Nasonex will be our first Perrigo-driven switch in the USA
Drive Rx-to-OTC switches • 73% Brand Awareness • Peak sales >$1B; larger than Flonase Rx (in the same 12 month period)
• Exclusivity: Exclusive rights via licensing agreement with Merck for the U.S. OTC market
• Equity in the brand’s most distinctive asset, the Bee
• Proof of concept: Nasonex switch paves the way for more Perrigo-led switches
Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property 121 of their respective owners. Takeaways – Repeatable Growth Platforms – Consumer Self-Care Americas
Investments in repeatable growth strategies will augment our market 1 leading position in the store brand self-care segment
Enhance our strategic importance to retailers through ‘bolt-on’ self-care 2 adjacencies
Strategically expand our presence through branded opportunities where 3 Perrigo can grow the segments we compete in
Identify opportunities where Perrigo can leverage its expertise to drive Rx – 4 OTC switches by investing in brands that expand into first-to-market store brand opportunities We will win with a balanced mix of executional excellence and investment in 5 new avenues of growth and innovation
122 Invest in repeatable growth platforms - Innovation
1 Reconfigure the Jim portfolio Dillard III
7 2 Deliver consistent and sustainable Achieve base plan results To make lives better by bringing Quality, Affordable Self-Care 6 3 Products™ that Invest in repeatable Capital allocation consumers trust growth platforms everywhere they are sold EVP and Chief Scientific 5 4 Drive organization Officer Fund growth effectiveness and sustainably build capabilities
123 We have redefined our innovation and R&D teams to leverage our global scale and ramp up organic innovation
We concentrated R&D functions globally New innovation group is identifying breakthrough ideas
Chief Scientific Officer
Global Global R&D Global Quality Regulatory
Consolidating R&D under a Chief Scientific Innovation is a forward-looking team that will Officer increases coordination and consistency highlight critical opportunities and drive cutting in the product development process edge and groundbreaking ideas
124 We are placing greater focus on innovation and embedding it within our DNA
Anticipated impact from our revised product development process
50+ number of ideas added
$500M+ pipeline value increase
125 Note: Based on last 90 days as of 4/15 Developing a wide variety of products and ideas across the innovation spectrum
RADICAL
Transformative innovations
LARGE, DISCONTINUOUS
New innovations close to core
INCREMENTAL Newness the market to Incremental innovations in core
CORE NEARBY DEPARTURE Newness to Perrigo
126 Focusing our time appropriately
70% 20% 10%
Incremental innovation New innovations close to core Transformative innovation
Continuous improvement New platforms adjacent New to the market and close to the core to the core and newer to the company to identify the market and shape key trends
127 We have three primary levers for rapid new product development
Organic innovation Leverage the portfolio JVs and partnerships
• Utilize improved product • Leverage products with high • Collaborate to expedite market development process to bring consumer value in untapped entry products to market more quickly categories across BU portfolios
Examples: Examples: Example:
New icon Naturals
Digital products / Nicotine services
128 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. We have put big ideas into our innovation pipeline
Incremental innovations in core New innovations close to core Transformative innovations
Infant formulas Vaping technology Nasonex
Nicotine category CBD Global eCommerce and digital strategy Cross the ocean Probiotics Naturals (Physiomer, Phytosun, Granufink, Zaffranax, Arterin) Pain relief (new forms) Digital consumer interaction
Category expanders (e.g., New delivery formats (e.g., teas) Chronic pain solutions cough/cold, nasal)
129 Vaping technology provides a platform to responsibly enter new categories and expand within existing ones with FDA approval
This technology may be used across many applications, including:
• Nicotine cessation
•CBD
• Analgesics
• …and many more
130 We have also signed a letter of intent for a joint development agreement in vaping dosing technology
Vapor Dosing Technologies will change the game through a delivery device and companion app that learns consumer behavior and preferences to personalize their experience
• Educates on use cases • Provides precise milligram dosing • Prevents overdosing • Gets smarter with every use to provide personalized experience
Strong distribution network across DTC channels through brands, retail distribution, and eCommerce
131 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. Initial concerns regarding negative customer reactions to CBD were unfounded
“CVS to sell CBD products in 800 stores in 8 states”
NBC News Net Doctor
“Rite Aid poised to sell its first cannabis-derived drug” “Walgreens will sell CBD products in nearly 1,500 CNN Business stores” USA Today
132 Note: The trademarks, trade names, trade dress, product names, and/or logos associated with the products pictured on this slide are the property of their respective owners. It represents a transformative innovation that can significantly add to our long-term top-line growth
The opportunity Alignment with Perrigo
Transformative potential Fits with Perrigo as a consumer $2B focused self-care company (2022) Nascent market with no established brands Currently a $0.6B market growing at ~50% p.a. Leverages scale and regulatory expertise
Innovation team is evaluating options for entry
133 Source: Haywood Securities In total, we are investing to ensure that we can meet our goals
$130M 1-3
Total R&D spend Years until our new pipeline planned for 2019 products make it to market
134 There is no lack of big ideas; reigniting innovation will drive superior consumer and customer value
135 Takeaways – Invest in repeatable growth platforms
1 Partnerships and licenses enable quicker entry into new categories
2 We are on the path to driving disruptive ideas
New processes and discipline ensure we approach innovation with focus 3 and efficiency
136 Drive organization effectiveness and build capabilities
1 Reconfigure the Ron portfolio Janish 7 2 Deliver consistent and sustainable Achieve base plan results To make lives better by bringing Quality, Affordable Self-Care 6 3 Products™ that Invest in repeatable Capital allocation consumers trust growth platforms everywhere they are sold EVP of Global Ops and Supply Chain, Chief 5 4 Drive organization Fund growth Transformation Officer effectiveness and sustainably build capabilities
137 We have realigned our organization around the work
Re-set our executive team (40%+ new or new-in-role)
Consolidated global R&D and innovation platforms
Reconfigured SI&OP teams and processes
Established consumer-focused capabilities in the Americas
Installed robust Business Intelligence capabilities
Realigned compensation incentives
Streamlined IT and Master Data
Formed Transformation Office to manage all the change 138 Business Intelligence capability will support increased proactive action
System Environment
Harmonization, Data ingestion Global data warehouse standardization
Dashboards with drill down capacity and causal data
• Powerful volume-based analytics • Causal data to improve: – Sales forecasting – Predictive analytics – Category management
139 SI&OP processes will promote best-in-class customer service
Commitment to regain our Positive momentum already Fully integrated processes competitive advantage (over the 1st Quarter)
• Improved service levels
• Lower inventory positions 90%
SI&OP • Increased forecast accuracy
• Improved organization 9 1 Week /2019 5 alignment ending 1/ 3/30/20 Sourcing
140 Transformation Office will lead us through the change
Focused core team to manage the change Financial support: Develops business case and identifies sources of value
People support: Change management and communication plans
Process support: 8 core team members in the Maintains integrated view of all Transformation Office projects Driving 40+ transformative initiatives
141 Our rewards system is aligned to the goals of the Transformation
From To
A system that rewarded A system that rewards capital efficiency where we’re going
• Return on capital • Consumer revenue • Working capital • Consumer operating income • Operating income • Strategic goals • Total shareholder return • Total shareholder return
142 Takeaways – Driving organizational effectiveness and building capabilities for competitive advantage
1 We’ve realigned our team to organize around the work
We are committed to regaining our competitive advantage and promoting 2 best-in-class service levels
3 Our Transformation Office will ensure it happens
4 Compensation programs will reward accomplishing the Transformation
143 Fund growth sustainably
1 Reconfigure the portfolio
7 2 Deliver consistent and sustainable Achieve base plan results To make lives better by bringing Quality, 6 Affordable Self-Care 3 Products™ that Invest in repeatable Capital allocation consumers trust growth platforms everywhere they are sold
5 4 Drive organization Fund growth effectiveness and sustainably build capabilities
144 Lean operations is in Perrigo’s DNA
• Culture values efficiency
• Annual productivity goals to offset inflation
• History of Perrigo is grounded in Private Label
• Focus on best possible value to customers and consumers
• Embodied in things like office space and locations
145 However, dis-synergies and investments for growth mandate a fresh look at our costs
Rx is a meaningful piece of today’s …and we also have a number of A cost program will help fund the business that absorbs cost… growth investments to fund transformation
• Innovation team • Expansion into new, exciting adjacencies like CBD We must responsibly • Cross the ocean initiatives fund our Transformation to the • Increased consumer marketing New Perrigo as we • Infant nutrition capacity reshape the P&L to • Tablet value stream capacity align with our CP peers
146 Source: Perrigo 10-K Project Momentum will fund growth investments and offset dis- synergies
Improve our maturity and operating 1 Realign our operating model 2 efficiency 3 Invest in capabilities we need
• Realign our organization to the • Reduce manual processes • Strengthen consumer strategy capabilities • Remove inefficient systems • Refocus our teams on critical • Enhance BI tools priorities • Leverage automation • Improve SI&OP processes
147 We have line of sight to $100M+; quick wins already underway to impact 2019 (full program will take 2-3 years)
Execution plan Example opportunities
• We have line of sight to $100M+ net savings* • Indirect procurement (e.g., lab supplies, temp labor, • Clean-sheet approach to re-design the way we work from consulting, travel, etc.) the ground up • Fines/cost of failure • We have an implementation roadmap to achieve our ambition over next 2-3 years • Redundant systems • We will reshape the P&L to align with CP peers, while reinvesting in critical capabilities and growth vectors • Stranded overhead cost • Quick wins are already in execution and will impact 2019
148 Note: Cost savings are net of strategic reinvestments, but exclude any restructuring charges Takeaways – Sustainably fund our growth
1 Being a lean company is in our DNA
Project Momentum will offset dis-synergies and help fund growth 2 investments
3 $100M+ in savings will drive us towards high-performing CPG peers
4 Quick wins already in execution to impact 2019 results
149 Capital allocation
1 Reconfigure the portfolio Raymond 7 2 Deliver consistent Silcock and sustainable Achieve base plan results To make lives better by bringing Quality, Affordable Self-Care 6 3 Products™ that Invest in repeatable Capital allocation consumers trust growth platforms everywhere they are sold EVP and CFO 5 4 Drive organization Fund growth effectiveness and sustainably build capabilities
150 New Perrigo has substantial cash generation potential
Sources of cash Reinvest for the long-term:
Cash on Hand $838M (as of 3/31) 1 Growth through M&A and CAPEX
Animal Health $185M Divestiture Cash up to $2.5B Rx Separation depending on structure 2 Economic value creation 2019 Adjusted • Debt pay-down Operating Income(1) (incl. Rx) $750M - $800M • Dividends (excl. Rx) $460M - $510M
151 (1) Adjusted OI includes $15M of depreciation related to Rx and $75M of depreciation related to New Perrigo; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures 1 First use of capital supporting our repeatable growth model: Acquire Ranir
Transaction terms • Purchase price of $750M, after NPV tax benefits: $685M
• Accelerates growth Strategic and • $0.10 accretive to 2019 (assuming Q3 close) financial impact • Complementary to our culture and talent
152 1 We are committing $250M in infrastructure spending over the next 4 years on top of our existing base
$50-75M annually $85M $250M over 4 years
Annual Base CAPEX Committed Incremental CAPEX
153 2 Annual dividend increased to $0.84 per share
Return capital to shareholders Continuing to grow the dividend toward peers
Dividend Adjusted Net Income Payout • Increased quarterly dividend by 11% to $0.21 per share starting June 2019 – $0.84 per share for four quarters
• 16th consecutive year with dividend increase
• Strong cash generation supports continued Dividend Yield annual dividend growth over time
Note: CPG peers include Beiersdorf, Church & Dwight, The Clorox Company, Colgate-Palmolive, Edgewell, Helen of Troy, Kimberly-Clark, Prestige Consumer Healthcare, Procter & Gamble, Reckitt Benckiser, B&G Foods, Lancaster Colony Corporation, TreeHouse Foods 154 Source: Perrigo Internal Data, Factset as of May 2, 2019 2 Appropriately reducing leverage
Priorities include: Gross Debt vs. 2019 Adjusted EBITDA (Guidance)¹ • Adding flexibility to our capital structure via 4 3.5x debt pay-down 3 2.5x • Maintaining investment grade status 2 • Supporting organic growth and bolt-on investments 1
0 2019 Projected Target
155 (1) See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Takeaways
1 New Perrigo has substantial cash generation potential
2 Acquire Ranir – an immediately accretive bolt-on
3 Increase dividend
4 Target debt pay down to increase balance sheet flexibility
156 Deliver consistent and sustainable results
1 Reconfigure the portfolio
7 2 Deliver consistent and sustainable Achieve base plan results To make lives better by bringing Quality, 6 Affordable Self-Care 3 Products™ that Invest in repeatable Capital allocation consumers trust growth platforms everywhere they are sold
5 4 Drive organization Fund growth effectiveness and sustainably build capabilities
157 We are aligning our reporting with our self-care strategy
Consumer Self-Care Americas Consumer Self-Care International Rx Pharmaceuticals (deal perimeter)
• Store brand Self-Care • Branded Self-Care • U.S. Generics
• Branded Self-Care • Store brand Self-Care • Israel Diagnostics and Distribution
• Infant Nutrition
•Mexico
158 Guidance for 2019 Results
Total Rx(1) New Perrigo (CSCA/CSCI/Corp) Perrigo(2) Net Sales $1.0B $3.6B - $3.7B $4.6B - $4.7B
Adjusted OI(3) $290M $460M - $510M $750M - $800M
Adjusted OM 30% 13% 17%
Adjusted Diluted EPS $3.65 - $3.95 EPS Upside (Ranir, Generic ProAir®, $0.10 - $0.35 Incr. cost savings) Operating Cash Flow $500M - $540M
® 159 (1) Not including Generic ProAir ; (2) Not including Ranir; (3) Adjusted OI that includes $15M of depreciation related to Rx and $75M of depreciation related to New Perrigo; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures We estimate 2-3 years to fully transform Perrigo into a high performing consumer company
Our transformation will allow us to deliver outsized growth at first
Upside
– Ongoing evaluation of Rx (1.10) capital structure – Additional M&A
New New Perrigo Perrigo
160 Note: Size of Business Growth, M&A, Cost Savings segments are illustrative; See attached Appendix for reconciliation of adjusted (non-GAAP) to reported (GAAP) financial measures Post transformation we expect to perform in line with our peers
Category Long term target
Revenue growth 3%
Adjusted operating income growth 5%
Adjusted diluted EPS growth 7%
161 Takeaways – Deliver consistent and sustainable results
1 2019 adjusted diluted EPS guidance of $3.65-3.95 per share with potential upside from Ranir and Generic ProAir® of $0.10-0.35 per share
2 2019 Operating Cash Flow of $500M - $540M
3 Offset dilution from Rx sale in the next 2-3 years through base growth, Ranir, and cost savings
162 Perrigo’s History, Current Situation, and Portfolio Reconfiguration Murray Kessler
Self-Care Market and What it Means for Perrigo Murray Kessler
Lessons Learned to Inform the Future Murray Kessler
Recapturing The Perrigo Advantage
Achieve Base Plan – International Svend Andersen
Achieve Base Plan and Invest in Repeatable Growth Platforms – Agenda Jeff Needham Americas
Invest in Repeatable Growth Platforms – Innovation Jim Dillard
Drive Organization Effectiveness and Fund Growth Sustainably Ron Janish
Capital Allocation and Deliver Consistent and Sustainable Results Ray Silcock
Summary Murray Kessler
Question and Answer
163 We have a clear path to achieving our vision and recapturing The Perrigo Advantage
• Sale or spin of Rx and sale of Animal Health 1 focuses Perrigo on self-care Reconfigure the portfolio • Investing $200M+ in base plan to Infant Nutrition and $50M to tablet 7 2 • Plan to perform in line Deliver capacity, plus launching $100M+ with consumer peers consistent and Achieve base plan in new products sustainable results To make lives better by • Significant bolt-ons via bringing Quality, acquisition (Ranir); investment in Affordable Self-Care Vapor Dosing Technologies and 6 3 • Rx and Animal Health Products™ that Invest in repeatable licensing (Naturals) Capital allocation proceeds and cash consumers trust growth platforms on hand to be everywhere they are sold • $25M in marketing for future redeployed brand launches
5 4 Drive organization • New (40%+) highly seasoned team Fund growth • $100M+ cost savings plan effectiveness and sustainably build capabilities • Established transformation office, centralized R&D, Purchasing, and Quality; created Innovation team
164 Summary
We have a new vision to transform the organization
We are transforming our business to align with our self-care vision
We are investing to re-ignite the core growth engine
We are accomplishing this through organic and inorganic growth avenues
We have organized around the work and are building strategic capabilities
We are making the tough decisions on cost to right size the company
We are allocating capital deliberately in a measured way that gives the company flexibility
We are committed to delivering consistent and sustainable growth in line with consumer peers
We believe New Perrigo should be re-rated with a consumer multiple
165 The New Perrigo will
Make lives better by bringing Quality, Affordable Self-Care Products™ that consumers trust everywhere they are sold
166 Thank you
167 This information is confidential and was prepared by ACME Corp.; it is not to be relied on by any 3rd party withoutBOS ACME's prior writtenPresentation1 consent Question and Answer
168 This information is confidential and was prepared by ACME Corp.; it is not to be relied on by any 3rd party withoutBOS ACME's prior writtenPresentation1 consent