Viatris Reports Fourth-Quarter and Full-Year 2023 Financial Results and Provides 2024 Financial Guidance - 28.02.24 - News

PITTSBURGH, Feb. 28, 2024

Meets 2023 Guidance for Total Revenues, Adjusted EBITDA and Free Cash Flow[1]
Reports 2023 Total Revenues of $15.4 Billion, U.S. GAAP Net Earnings of $54.7 Million, Adjusted EBITDA of $5.1 Billion, U.S. GAAP Net Cash Provided by Operating Activities of $2.8 Billion and Free Cash Flow of $2.4 Billion
Reports Third Consecutive Quarter of Operational Revenue Growth on a Divestiture-Adjusted Basis in 2023 and Expects to see Continued Growth in 2024[2]
Immediately Adds Two Phase 3 Assets, Selatogrel and Cenerimod, Both With Blockbuster Revenue Potential, Through Global Research and Development Collaboration With Idorsia; Announces R&D Event to be Held March 27, 2024
Completes $250 Million in Share Repurchases to Date in 2024; Board of Directors Increases Share Repurchase Authorization by Additional $1 Billion, Bringing Total Authorization to $2 Billion
Board of Directors Maintains Dividend Policy for 2024 of 48 Cents ($0.48) per Share and Declares First Quarter Dividend of 12 Cents ($0.12) per Share

Viatris Inc. (NASDAQ: VTRS) today announced its financial results for the fourth quarter and full year 2023.

Financial Impact of Transactions and Acquired IPR&D

($M)

2023 Guidance
Ranges

(November 7, 2023)

–

ARIVA.DE Börsen-Geflüster

Kurse

Viatris Inc

9,952 €

+0,22%

Divestitures and
Acquisitions⁽¹⁾

–

Acquired IPR&D⁽²⁾

=

2023 Adjusted
Guidance Ranges

2023 Results

Total Revenues

$15,400 - $15,600

($35)

—

$15,365 - $15,565

$15,427

Adjusted EBITDA

$5,000 - $5,400

($20)

($105)

$4,875 - $5,275

$5,124

Free Cash Flow

$2,300 - $2,700

($235)

($100)

$1,965 - $2,365

$2,423

As previously disclosed, guidance ranges as provided on November 7, 2023, included the full-year expected performance for the planned divestitures and excluded any potential related costs such as taxes and transaction costs, any similar costs related to the eye care acquisitions, as well as any acquired IPR&D. As a result, the November 7, 2023, guidance ranges did not include the following:

	⁽¹⁾	Divestitures and Acquisitions impact includes $35M Total Revenues, $20M Adjusted EBITDA, and $15M Free Cash Flow from the divestitures closed in 2023 (for the period of the respective closing dates to December 31, 2023), as well as $219M of related transaction costs and taxes in Free Cash Flow.
	⁽²⁾	Acquired IPR&D impact on Adjusted EBITDA and Free Cash Flow of $105M and $100M, respectively, was primarily related to upfront licensing payments.

Executive Commentary

Viatris CEO Scott A. Smith said: "2023 was an outstanding year for Viatris in which we delivered strong operational results, streamlined the Company and finished the year with our third consecutive quarter of operational revenue growth. As we begin 2024, we are already executing on our vision for our next chapter—balancing the return of capital to shareholders through share repurchases and dividends, continuing to fuel our base business and investing in future growth with today's announcement of what we expect will be a strategically significant global research and development collaboration with Idorsia. We remain focused on the many opportunities we see this year and beyond to continue to deliver on our mission to empower people worldwide to live healthier at every stage of life."

Viatris President Rajiv Malik said: "As we close Phase 1 of our strategy, I am incredibly proud of all that we have accomplished to integrate, simplify and, more importantly, stabilize the base business. Our strong results in 2023 reflect our consistent operational and scientific execution. Based on the stability of our core business and our deep pipeline, we believe the Company is well positioned for continued growth in 2024 and beyond."

Viatris CFO Sanjeev Narula said: "The Company had another solid year, we met our financial guidance and continued to generate strong and durable cash flow. Our substantial cash flow over the last three years has enabled us to execute on our capital allocation commitments in Phase 1 of debt paydown, business development and capital return. We believe we are in a strong financial position with the return to organic revenue growth serving to further strengthen our foundation and position us well for 2024 and beyond."

[1] With respect to the 2023 guidance ranges provided on November 7, 2023, Viatris did not provide forward-looking guidance for U.S. GAAP net earnings (loss) or a quantitative reconciliation of its 2023 Adjusted EBITDA guidance. U.S. GAAP net cash provided by operating activities for 2023 was estimated to be between $2.8 billion and $3.1 billion. As previously disclosed, such guidance ranges included the full year expected performance for the planned divestitures and excluded any potential related costs, such as taxes and transaction costs, as well as any similar costs related to the eye care acquisitions, and also excluded any acquired IPR&D. Please see "Non-GAAP Financial Measures" for additional information.

[2] For the quarter ended December 31, 2023, total net sales declined 1% on a U.S. GAAP basis and increased 1% on a divestiture-adjusted operational basis.

2024 Financial Guidance

The Company is providing the following financial guidance metrics for fiscal year 2024.

The Company is not providing forward-looking guidance for U.S. GAAP net earnings (loss) or U.S. GAAP earnings per share (EPS) or a quantitative reconciliation of its 2024 adjusted EBITDA or adjusted EPS guidance to the most directly comparable U.S. GAAP measures, U.S. GAAP net earnings (loss) or U.S. GAAP EPS, respectively, because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items, including integration, acquisition and divestiture-related expenses, restructuring expenses, asset impairments, litigation settlements, and other contingencies, such as changes to contingent consideration, acquired IPR&D and certain other gains or losses, including for the fair value accounting for non-marketable equity investments, as well as related income tax accounting, because certain of these items have not occurred, are out of the Company's control and/or cannot be reasonably predicted without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. U.S. GAAP net cash provided by operating activities for 2024 is estimated to be between $2.75 billion and $3.05 billion, with a midpoint of approximately $2.9 billion.

*(In billions, except Adjusted EPS)*	2024 Guidance Range⁽²⁾⁽³⁾	2024 Midpoint
Total Revenues	$15.25 - $15.75	$15.50
Adjusted EBITDA ⁽¹⁾	$4.8 - $5.1	$4.95
Free Cash Flow ⁽¹⁾	$2.3 - $2.7	$2.5
Adjusted EPS ⁽¹⁾	$2.70 - $2.85	$2.78

⁽¹⁾	Non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information.
⁽²⁾	Includes the full-year expected performance for the pending announced divestitures and excludes any potential related costs, such as taxes and transaction costs. Also excludes any acquired IPR&D to be incurred in any future period as it cannot be reasonably forecasted.
⁽³⁾	Estimated 2024 Total Revenues and Adjusted EBITDA associated with the pending announced divestitures is ~$1,100M and ~$320M, respectively.

Key Exchange Rates Used for 2024 Guidance
China Renminbi ($ / CNY)		7.25
Euro ($ / EUR)		0.92
Indian Rupee ($ / INR)		82.00
Japanese Yen ($ / JPY)		144.30

Return of Capital to Shareholders

Viatris announced that on February 26, 2024, its Board of Directors approved a 2024 dividend policy of 48 cents ($0.48) per share and declared a quarterly dividend of 12 cents ($0.12) for each issued and outstanding share of the Company's common stock. The dividend is payable on March 18, 2024, to shareholders of record at the close of business on March 11, 2024.

In February 2024, the Company repurchased approximately 19.2 million shares of common stock at a cost of approximately $250 million, as part of its previously announced $1.0 billion share repurchase program that Viatris' Board of Directors authorized.

The Company announced that on February 26, 2024, its Board of Directors authorized a $1.0 billion increase to the Company's previously announced $1.0 billion share repurchase program. As a result, the Company's share repurchase program now authorizes the repurchase of up to $2.0 billion of the Company's shares of common stock. The Company has repurchased a total of $500 million in shares through February 28, 2024, under the program.

R&D Event

Viatris will hold an R&D Event on March 27, 2024, from 10 a.m. to noon ET, in New York City.

The event will include presentations from Viatris executives discussing the collaboration with Idorsia and other elements of the Company's pipeline, as well as presentations from two expert thought leaders. The presenters will be available to answer questions at the end of the presentations.

Expert thought leaders presenting at the event are:

Dr. Deepak L. Bhatt, MD, MPH, a top expert in cardiovascular medicine and interventional cardiology, Director of Mount Sinai Heart. Dr. Bhatt is highly recognized for his significant breakthroughs in the field of cardiology, including interventional cardiology, heart disease prevention, vascular medicine and heart failure.
Dr. Anca Askanase, MD, founder and clinical director of Columbia University's new Lupus Center and the Director of Rheumatology Clinical Trials. Dr. Askanase is an internationally renowned clinician, diagnostician and researcher with more than 15 years specializing in complex SLE. Dr. Askanase trained as a rheumatologist at New York University where she remained for more than 15 years on faculty, directing clinical trials, training fellows and residents, and treating challenging cases of SLE at NYU's prestigious hospitals.

Interested parties will be able to access a live webcast of the event at investor.viatris.com. An archived version also will be available following the live event and can be accessed at the same location for a limited time.

Conference Call and Earnings Materials

Viatris will host a conference call and live webcast, today at 8:30 a.m. ET, to review the Company's fourth quarter and full-year 2023 financial results, along with 2024 financial guidance. Investors and the general public are invited to listen to a live webcast of the call at investor.viatris.com or by calling 844.308.3344 or 412.317.1896 for international callers. The "Viatris Q4 and Full-Year 2023 Earnings Presentation," which will be referenced during the call, can be found at investor.viatris.com. A replay of the webcast also will be available on the website.

Financial Summary

Three Months Ended

December 31,

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