Viatris Inc.

Good morning. My name is Leo and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Beatrice 2022 second quarter earnings call and webcast. All participant lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer period. If you would like to ask a question at that time, please press star one on your telephone keypad. If you need to ask further questions, you may re-enter the queue. Lastly, If you should require operator assistance, please press star zero. Thank you. I'll now turn the call over to Bill Cebulski, Head of Global Capital Markets. Please go ahead.

Bill Cebulski Thank you and good morning, everyone. Welcome to our second quarter 2022 earnings call. Joining me today is Michael Gettler, our Chief Executive Officer, Rajiv Malik, our President, and Sanjeev Narua, our Chief Financial Officer. A copy of today's presentation and other earnings materials are available on our website at investor.gatris.com. During today's discussion, we will be making forward-looking statements on a number of matters, including our financial guidance for 2022 and various strategic initiatives. These forward-looking statements are subject to risk and uncertainties that could cause future results or events to differ materially from today's projections. Please refer to slide two of the presentation and our SEC filings for a full explanation of these risks and uncertainties. We will also be referring to certain actual and projected non-GAAP financial measures to supplement investors' understanding of our financial performance. Non-GAAP financial measures are reconciled to comparable GAAP measures on our website and in today's presentation. With that, now I'd like to hand the call over to Michael.

Thank you, Bill, and good morning, everybody. Thank you all for joining us for our second quarter 2022 earnings call. I'm proud to report that we're hitting on all cylinders operationally, even while foreign exchange rates continue to be challenging, and we have now demonstrated six consecutive quarters of strong performance. We're delivering on our financial and strategic commitments, and we're making great progress on the reshaping initiatives, which we announced in February. Remember, Vietris was designed with diversification and resilience in mind. We believe our geographic and product diversity allows us to balance occasional headwinds in one part of the business with opportunities in others, which we expect will enable us to deliver consistent and predictable performance over time. We are reaffirming our full-year 2022 financial guidance ranges for adjusted EBITDA and free cash flow. Because of our continued strong operational performance, we believe that we can absorb the foreign exchange rate impact within those ranges. However, we are revising our full year 2022 financial guidance range for total revenue solely to reflect our current expectation of the negative impact of foreign exchange rates. You will hear later more specific commentary on the guidance ranges for all three of these metrics, including our consideration of the foreign exchange rate impacts. Now let me share some highlights from the quarter. In the second quarter, we reported total revenue of $4.12 billion and adjusted EBITDA of $1.48 billion. Pre-cash flow generation continues to be strong at $719 million for the quarter. I'm pleased with our solid performance across segments this quarter, particularly in China and our operational growth in Europe. Our continued strong performance has enabled us to continue to deliver on our financial commitments for debt repayment and returning capital to shareholders through the payment of our dividends. In the first half of the year, we paid down approximately $1.5 billion in debt, and we're on track to achieve approximately $2 billion in debt repayment for the year. We continue to be committed to maintaining our investment grade rating, which is something we believe really differentiates us from our peers. Our board of directors has again authorized payment of a quarterly dividend of 12 cents per share. And we're very proud that our internal development engine continues to deliver key pipeline milestones which we believe positions us well to continue to move up the value chain. Overall, we're on track for approximately $600 million in new product revenue for the full year, and we look forward to the anticipated launch of Linalidomide in the second half of 2022. And finally, we're continuing our successful integration, capturing synergies, and simplifying our processes and our organization. By the end of this year, we expect to have exited substantially all transitional service agreements with Pfizer. In addition, we're seeing continued strong engagement for our employees, who are all working diligently to execute on our priorities. As you remember, in February, we announced a significant global reshaping initiative to unlock trap value and build what we expect to be a simpler, stronger, and more focused company that's well positioned to deliver more access to patients and more value to shareholders. We continue to make good progress on the biosimilar transaction with our partner, Biocomp Biologics. The transaction received key antitrust clearances in the US, India, and other markets, and we're still targeting a deal close in the second half of this year. While we await final regulatory approval from the Reserve Bank of India, the two companies have been working productively to put plans and transition service agreements in place to ensure business continuity for patients, customers, and, importantly, our colleagues. We're also making good progress on the previously announced divestitures of other select non-core assets, and we continue to expect to execute against these plans by the end of 2023. With regard to business development, we further ramped up our inorganic activities in our global healthcare gateway. We're looking at everything. We remain therapeutic area agnostic, and our business development efforts are centered on bolt-on and tuck-in opportunities that match our three identified therapeutic areas for moving up the value chain, as well as other opportunities. In summary, we had a very strong quarter and we're excited about the future we're building for the address. The entire company is focused on executing on the initiatives we set forth for the business, meeting or exceeding our operational goals that we have set, generating significant free cash flow and unlocking value while reshaping our company for a stronger future. With that, let me turn it over to Rajiv. Rajiv?