johnsone/initiation · Datasets at Hugging Face

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discontinued in the U.S. and Canada).
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
34
Andrea Teixeira, CFA AC
(1-212) 622-6735
andrea.f.teixeira@jpmorgan.com
North America Equity Research
29 May 2023 J PMORGAN
Benchmarking Against Peers – HLN Anchor at Low End, Already at CL Levels, PG Aspirational
The closest peer to KVUE, in our view, is Haleon (HLN, covered by Celine Pannuti)
given similar category exposures (e.g., pain relief, cold, cough, allergy, oral), financial metrics (e.g., sales, EBITDA, growth outlook), and geographic exposures (KVUE ~70%
developed markets vs. HLN roughly two-thirds). HLN was also formed as a result of a carve-out from a larger pharma company (GSK in this case).
There are some differences between the companies. From a financial perspective,
KVUE has a more attractive dividend yield (~3.0% vs. HLN 1.6%) and lower leverage (2.1x net-debt-to-EBITDA vs. HLN 3.6x). KVUE has exposure to faster growing
categories like Skin Health & Beauty, while HLN has exposure to (typically) faster
growing categories like VMS (notwithstanding post-COVID normalization and
somewhat discretionary nature of products); while overall DM/EM exposure is similar,
KVUE has higher exposure to North America (~50%) vs. HLN (~37%) and lower
exposure to EMEA and LatAm (KVUE ~29% combined vs. HLN ~39%), while APAC exposure is similar (KVUE 21%, HLN 23%). The most important difference, in our
view, is the stronger brand portfolio of KVUE with seven brands in a number 1 position
globally, while HLN claims a number 1 position in digestive health and therapeutic oral health (under sensitive franchise for Sensodyne). That said, overall it appears that in the U.S. at least in categories with direct competitive entries from both KVUE and HLN
that KVUE holds the edge in household penetration (e.g., allergy, cough, cough, and flu,
pain relief) based on Numerator data.
Post-IPO, KVUE􀋖s valuation multiple has already migrated close to U.S.-based peer
Colgate-Palmolive (CL, OW-rated), which also has similar financial KPIs.
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
35
Andrea Teixeira, CFA AC
(1-212) 622-6735
andrea.f.teixeira@jpmorgan.com
North America Equity Research
29 May 2023 J P M O R G A N
Table 2: KVUE Key KPIs and Valuation vs. Direct Peer Set
Kenvue (KVUE) Haleon (HLN) Colgate-Palmolive (CL)* The Procter & Gamble Company (PG)
Geographic Exposure (Sales)
North America 50% 38% 21% --
US 44% 34% 33% 45%
APAC 21% 23% 16% --
EMEA & LatAM 29% 39% 42%
EMEA 21% -- -- --
LatAM 8% -- -- --
International 56% 66% 67% 54%
Pet -- -- 21% --
Self Care - 40% of sales - Tylenol, Zyrtec,
Nicorette, Motrin, Zarbee's, Orsl, Benadryl,
Rhinocort
Pain Relief - 23% of sales - Advil, Panadol,
Voltaren
Oral Care - 43% of sales - Colgate, Sorriso,
Tom's of Maine, elmex, hello
Health Care - 14% of sales - Crest, Oral-B, Vicks,
ZzzQuil, Pepto-Bismol, Clearblue, Align,
Metamucil
Skin Health & Beauty - 29% of sales -
Neutrogena, Aveeno, OGX, Dabao, Lubriderm,
Rogaine, Clean&Clear, Dr.Ci:Labo, Le Petit
Marseillais
Respiratory Health - 15% of sales - Theraflu,
Otrivin, Flonase
Personal Care - 19% of sales - Softsoap, Speed
Stick, Lady Speed Stick, Irish Spring, Tom's of
Maine, Filorga, eltaMD, Protex, Sanex, Palmolive,
PCA Skin
Beauty - 18% of sales - Olay, SK-II, Native, Old
Spice, Head & Shoulders, Herbal Essences,
Pantene
Essential Health - 31% of sales - Listerine, Band-
Aid, Johnson's, Neosporin, Stayfree, o.b.,
Carefree
Oral - 27% of sales - Sensodyne, Paradontax,
Polident, Biotene
Home Care - 17% of sales - Palmolive, Suavitel,
Ajax, Fabuloso
Fabric & Home Care - 35% of sales - Tide, Gain,
Bounce, Downy, Ariel, Dawn, Cascade, Febreze,
Swiffer, Mr. Clean
VMS - 15% of sales - Centrum, Emergen-C,
Caltrate
Pet - 21% of sales - Hill's Pet Nutrition
Baby, Feminine, and Family Care - 25% of
sales - Pampers, Luvs, Bounty, Charmin, Puffs,
Tampax, Always
Digestive Health & Other - 19% of sales - Tums,
Preparation H, Eno, Fenistil
Grooming - 8% of sales - Gillette, Braun, Venus
Kenvue (KVUE) Haleon (HLN) Colgate-Palmolive (CL)* The Procter & Gamble Company (PG)
CY22 Net Sales ($B) $15.0 $13.4 $18.0 $80.3
CY23-CY25 Organic Sales CAGR 4.7% 4.8% 4.9% 4.5%
CY22 adjusted EBITDA ($B) $3.6 $3.4 $4.2 $20.1
CY22 adjusted EBITDA Margin 24.1% 25.1% 23.5% 25.0%
CY23-CY25 EBITDA CAGR 6.1% 6.2% 7.0% 8.4%
Net-Debt-to-TTM EBITDA 2.1x 3.6x 1.9x 1.4x
Dividend Yield 3.0% 1.6% 2.7% 2.5%
2023 EV/EBITDA 15.5x 14.0x 15.8x 17.8x
2024 EV/EBITDA 14.7x 13.3x 14.7x 16.7x
2023 P/E 23.8x 18.3x 24.3x 23.9x
2024 P/E 23.1x 16.9x 22.2x 21.9x
Financial & Valuation Metrics
Company Geographic and Segment Mix
Segment & Key Brands

discontinued in the U.S. and Canada).

This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.

34

Andrea Teixeira, CFA AC

(1-212) 622-6735

andrea.f.teixeira@jpmorgan.com

North America Equity Research

29 May 2023 J PMORGAN

Benchmarking Against Peers – HLN Anchor at Low End, Already at CL Levels, PG Aspirational

The closest peer to KVUE, in our view, is Haleon (HLN, covered by Celine Pannuti)

given similar category exposures (e.g., pain relief, cold, cough, allergy, oral), financial metrics (e.g., sales, EBITDA, growth outlook), and geographic exposures (KVUE ~70%

developed markets vs. HLN roughly two-thirds). HLN was also formed as a result of a carve-out from a larger pharma company (GSK in this case).

There are some differences between the companies. From a financial perspective,

KVUE has a more attractive dividend yield (~3.0% vs. HLN 1.6%) and lower leverage (2.1x net-debt-to-EBITDA vs. HLN 3.6x). KVUE has exposure to faster growing

categories like Skin Health & Beauty, while HLN has exposure to (typically) faster

growing categories like VMS (notwithstanding post-COVID normalization and

somewhat discretionary nature of products); while overall DM/EM exposure is similar,

KVUE has higher exposure to North America (~50%) vs. HLN (~37%) and lower

exposure to EMEA and LatAm (KVUE ~29% combined vs. HLN ~39%), while APAC exposure is similar (KVUE 21%, HLN 23%). The most important difference, in our

view, is the stronger brand portfolio of KVUE with seven brands in a number 1 position

globally, while HLN claims a number 1 position in digestive health and therapeutic oral health (under sensitive franchise for Sensodyne). That said, overall it appears that in the U.S. at least in categories with direct competitive entries from both KVUE and HLN

that KVUE holds the edge in household penetration (e.g., allergy, cough, cough, and flu,

pain relief) based on Numerator data.

Post-IPO, KVUE􀋖s valuation multiple has already migrated close to U.S.-based peer

Colgate-Palmolive (CL, OW-rated), which also has similar financial KPIs.

This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.

35

Andrea Teixeira, CFA AC

(1-212) 622-6735

andrea.f.teixeira@jpmorgan.com

North America Equity Research

29 May 2023 J P M O R G A N

Table 2: KVUE Key KPIs and Valuation vs. Direct Peer Set

Kenvue (KVUE) Haleon (HLN) Colgate-Palmolive (CL)* The Procter & Gamble Company (PG)

Geographic Exposure (Sales)

North America 50% 38% 21% --

US 44% 34% 33% 45%

APAC 21% 23% 16% --

EMEA & LatAM 29% 39% 42%

EMEA 21% -- -- --

LatAM 8% -- -- --

International 56% 66% 67% 54%

Pet -- -- 21% --

Self Care - 40% of sales - Tylenol, Zyrtec,

Nicorette, Motrin, Zarbee's, Orsl, Benadryl,

Rhinocort

Pain Relief - 23% of sales - Advil, Panadol,

Voltaren

Oral Care - 43% of sales - Colgate, Sorriso,

Tom's of Maine, elmex, hello

Health Care - 14% of sales - Crest, Oral-B, Vicks,

ZzzQuil, Pepto-Bismol, Clearblue, Align,

Metamucil

Skin Health & Beauty - 29% of sales -

Neutrogena, Aveeno, OGX, Dabao, Lubriderm,

Rogaine, Clean&Clear, Dr.Ci:Labo, Le Petit

Marseillais

Respiratory Health - 15% of sales - Theraflu,

Otrivin, Flonase

Personal Care - 19% of sales - Softsoap, Speed

Stick, Lady Speed Stick, Irish Spring, Tom's of

Maine, Filorga, eltaMD, Protex, Sanex, Palmolive,

PCA Skin

Beauty - 18% of sales - Olay, SK-II, Native, Old

Spice, Head & Shoulders, Herbal Essences,

Pantene

Essential Health - 31% of sales - Listerine, Band-

Aid, Johnson's, Neosporin, Stayfree, o.b.,

Carefree

Oral - 27% of sales - Sensodyne, Paradontax,

Polident, Biotene

Home Care - 17% of sales - Palmolive, Suavitel,

Ajax, Fabuloso

Fabric & Home Care - 35% of sales - Tide, Gain,

Bounce, Downy, Ariel, Dawn, Cascade, Febreze,

Swiffer, Mr. Clean

VMS - 15% of sales - Centrum, Emergen-C,

Caltrate

Pet - 21% of sales - Hill's Pet Nutrition

Baby, Feminine, and Family Care - 25% of

sales - Pampers, Luvs, Bounty, Charmin, Puffs,

Tampax, Always

Digestive Health & Other - 19% of sales - Tums,

Preparation H, Eno, Fenistil

Grooming - 8% of sales - Gillette, Braun, Venus

Kenvue (KVUE) Haleon (HLN) Colgate-Palmolive (CL)* The Procter & Gamble Company (PG)

CY22 Net Sales ($B) $15.0 $13.4 $18.0 $80.3

CY23-CY25 Organic Sales CAGR 4.7% 4.8% 4.9% 4.5%

CY22 adjusted EBITDA ($B) $3.6 $3.4 $4.2 $20.1

CY22 adjusted EBITDA Margin 24.1% 25.1% 23.5% 25.0%

CY23-CY25 EBITDA CAGR 6.1% 6.2% 7.0% 8.4%

Net-Debt-to-TTM EBITDA 2.1x 3.6x 1.9x 1.4x

Dividend Yield 3.0% 1.6% 2.7% 2.5%

2023 EV/EBITDA 15.5x 14.0x 15.8x 17.8x

2024 EV/EBITDA 14.7x 13.3x 14.7x 16.7x

2023 P/E 23.8x 18.3x 24.3x 23.9x

2024 P/E 23.1x 16.9x 22.2x 21.9x

Financial & Valuation Metrics

Company Geographic and Segment Mix

Segment & Key Brands