johnsone/initiation · Datasets at Hugging Face

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Accrued rebates, returns and promotions 930.9 874.6 834.4 862.2 900.9 936.2 976.3
Accrued taxes on income 483.1 409.7 366.4 336.1 354.8 368.7 384.5
Other current liabilities - - - - - - -
Total Current Liabilities 3,625.1 3,877.7 4,051.0 3,934.0 4,048.6 4,227.1 4,379.1
Long-term debt, net of current maturities - - - - 8,512.1 8,309.8 8,121.7
Employee related obligations 303.4 345.0 302.2 213.5 213.5 213.5 213.5
Deferred taxes on income 2,467.2 2,781.7 2,729.0 2,462.8 2,462.8 2,462.8 2,462.8
Other long-term liabilities 726.7 804.7 754.0 727.0 727.0 727.0 727.0
Total Non-current Liabilities 3,497.3 3,931.4 3,785.2 3,403.3 11,915.4 11,713.0 11,525.0
Total Liabilities 7,122.4 7,809.1 7,836.2 7,337.2 15,964.0 15,940.1 15,904.1
Total Equity 22,088.5 21,370.7 20,015.4 19,942.8 11,155.2 11,513.3 12,210.9
Total Liabilities and Equity 29,210.9 29,179.8 27,851.6 27,280.0 27,119.1 27,453.4 28,115.0
Source: Company reports and J.P. Morgan estimates.
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
51
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
Cash Flow Historical & Estimates
Table 13: KVUE Cash Flow Statement
$ million
Cash Flow Statement 2019 2020 2021 2022 2023E 2024E 2025E
Operating Activities
Net income 1,724.8 2,325.8 2,348.8 2,286.0 2,142.1 2,203.8 2,463.9
Post-tax amortization 332.1 377.2 362.4 302.7 280.9 264.4 245.5
Depreciation 365.1 331.3 317.4 296.0 310.2 334.9 351.7
Tax impact on amortization 12.1 38.0 51.1 45.3 42.7 40.2 37.3
Stock-based compensation expense 102.4 115.5 141.3 137.1 141.8 146.0 150.4
Other operating activities 146.0 24.0 20.3 13.0 - - -
Deferred income taxes 160.9 109.1 (159.2) (104.9) - - -
Other current and non-current assets 51.4 29.9 30.2 75.9 (8.1) (8.7) (6.2)
Accrued liabilities 40.6 123.0 49.8 (17.0) 72.1 81.0 72.5
Employee related obligations 3.4 0.2 13.7 2.0 - - -
Accrued taxes on income 166.1 (82.9) (26.7) (6.8) 18.7 13.9 15.8
Other liabilities 115.4 85.0 (22.7) 49.7 - - -
Separation Costs - - - - (312.4) (222.0) (59.5)
Trade receivables 40.2 264.8 (303.1) (142.0) (159.2) (89.3) (101.1)
Inventories 180.0 108.9 (76.8) (582.0) 268.9 105.2 33.6
Accounts payable 2.6 154.0 330.5 52.0 23.9 83.6 63.7
Net change in operating working capital 222.7 527.7 (49.4) (672.0) 133.5 99.4 (3.8)
Net cash (used in) provided by operating activities 3,443.1 4,003.7 3,077.2 2,407.1 2,821.4 2,953.0 3,267.5
Investing Activities
Purchase of property, plant and equipment (288.9) (229.0) (294.9) (374.8) (416.7) (482.2) (504.2)
Acquisitions, investments, and proceeds from disposal of assets/businesses/investments (1,866.1) 145.5 123.4 (14.9) (375.0) (500.0) (750.0)
Other - - - - - - -
Net cash (used in) provided by investing activities (2,155.0) (83.4) (171.5) (389.6) (791.7) (982.2) (1,254.2)
Financing Activities
Proceeds from loans and notes payable - - - 14.3 8,995.0 - -
Repayments of debt (40.2) (11.4) (7.0) - (482.9) (202.3) (188.0)
Net share issuance - - - - (72.0) (198.5) (238.7)
Dividends paid - - - - (774.1) (1,571.3) (1,618.5)
Net transfer from (to) the parent (1,090.6) (4,052.1) (2,735.7) (1,478.8) (9,913.0) - -
Other - - - - - - -
Net cash (used in) provided by financing activities (1,130.8) (4,063.4) (2,742.7) (1,464.5) (2,247.0) (1,972.1) (2,045.2)
Effect of exchange rate changes (10.6) 8.7 (40.6) (61.5) - - -
Net (dec)/increase in cash and equivalents 146.6 (134.4) 122.4 491.5 (217.3) (1.4) (31.9)
Cash at beginning of period 605.4 752.0 617.6 740.0 1,231.4 1,014.1 1,012.8
Cash at end of period 752.0 617.6 740.0 1,231.4 1,014.1 1,012.8 980.9
Free Cash Flow 3,154.2 3,774.8 2,782.4 2,032.4 2,404.7 2,470.7 2,763.3
FCF Conversion 153% 140% 103% 79% 100% 101% 103%
Source: Company reports and J.P. Morgan estimates.
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
52
Andrea Teixeira, CFA AC
(1-212) 622-6735
andrea.f.teixeira@jpmorgan.com
North America Equity Research
29 May 2023 J PMORGAN
Strong, Global Management Team
KVUE has a strong, seasoned management team that will benefit from continuity as
many of the c-level executives ushered in the strategic transformation beginning in the 2019 time frame through the IPO. Moreover, the consumer segment largely operated
independently within JNJ historically, and as such, even after the separation, the organization should be well positioned to continue life as a public company. The management team has around 18 years of experience in consumer goods and healthcare on average and is a diverse group including over 58% women and representing nine different nationalities. Below, we highlight some of the key members of the executive team.
• Thibaut Mongon, CEO – Mr. Mongon served as Executive Vice President and
Worldwide Chairman, Consumer Health at Johnson & Johnson since 2019 and had
been with the company since 2000. Mr. Mongon joined the Consumer Health
organization in 2014 as Group Chairman Asia-Pacific and prior to that joined the Pharmaceutical sector in 2012 as Global Commercial Strategy Leader for the Neuroscience therapeutic division.
• Paul Ruh, CFO – Mr. Ruh joined Johnson & Johnson in 2017 as Chief Financial Officer, Consumer Health. Prior to Johnson & Johnson, Mr. Ruh held several financial leadership roles at PepsiCo, including CFO of Latin America, CFO of
PBA, and CFO PepsiCo Foodservice. Prior to PepsiCo, Mr. Ruh held roles at Procter & Gamble and McKinsey. All together, Mr. Ruh has over 30 years
experience in the consumer goods sector.
• Jan Meurer, Chief Growth Officer – Mr. Meurer joined Johnson & Johnson in
2015 and most recently served as Global Head of Strategy, Consumer Health. Prior
to that, Mr. Meurer held the roles of President, Johnson & Johnson Southeast Asia and Area Managing Director Central Europe, Consumer Health. Prior to Johnson & Johnson, Mr. Meurer spent time at Procter & Gamble, PGT Healthcare, and Siemens
Technologies. All together, Mr. Meurer has over 25 years experience building
consumer brands.
• Meredith (Meri) Stevens, Chief Operations Officer – Ms. Stevens joined Johnson
& Johnson in 2015 and most recently served as Worldwide Vice President,
Consumer Health Supply Chain and Deliver. Prior to that, Ms. Stevens led Supply
Chain Strategy and Deployment at Johnson & Johnson. Prior to Johnson & Johnson,
Ms. Stevens held roles at Newell Rubbermaid (Chief Supply Chain Officer) and
Tyco, Bertelsmann, Knoll, and General Electric in operations and procurement leadership positions. All together, Ms. Stevens has over 30 years of operations
experience.
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
53
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

Accrued rebates, returns and promotions 930.9 874.6 834.4 862.2 900.9 936.2 976.3

Accrued taxes on income 483.1 409.7 366.4 336.1 354.8 368.7 384.5

Other current liabilities - - - - - - -

Total Current Liabilities 3,625.1 3,877.7 4,051.0 3,934.0 4,048.6 4,227.1 4,379.1

Long-term debt, net of current maturities - - - - 8,512.1 8,309.8 8,121.7

Employee related obligations 303.4 345.0 302.2 213.5 213.5 213.5 213.5

Deferred taxes on income 2,467.2 2,781.7 2,729.0 2,462.8 2,462.8 2,462.8 2,462.8

Other long-term liabilities 726.7 804.7 754.0 727.0 727.0 727.0 727.0

Total Non-current Liabilities 3,497.3 3,931.4 3,785.2 3,403.3 11,915.4 11,713.0 11,525.0

Total Liabilities 7,122.4 7,809.1 7,836.2 7,337.2 15,964.0 15,940.1 15,904.1

Total Equity 22,088.5 21,370.7 20,015.4 19,942.8 11,155.2 11,513.3 12,210.9

Total Liabilities and Equity 29,210.9 29,179.8 27,851.6 27,280.0 27,119.1 27,453.4 28,115.0

Source: Company reports and J.P. Morgan estimates.

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

51

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

Cash Flow Historical & Estimates

Table 13: KVUE Cash Flow Statement

$ million

Cash Flow Statement 2019 2020 2021 2022 2023E 2024E 2025E

Operating Activities

Net income 1,724.8 2,325.8 2,348.8 2,286.0 2,142.1 2,203.8 2,463.9

Post-tax amortization 332.1 377.2 362.4 302.7 280.9 264.4 245.5

Depreciation 365.1 331.3 317.4 296.0 310.2 334.9 351.7

Tax impact on amortization 12.1 38.0 51.1 45.3 42.7 40.2 37.3

Stock-based compensation expense 102.4 115.5 141.3 137.1 141.8 146.0 150.4

Other operating activities 146.0 24.0 20.3 13.0 - - -

Deferred income taxes 160.9 109.1 (159.2) (104.9) - - -

Other current and non-current assets 51.4 29.9 30.2 75.9 (8.1) (8.7) (6.2)

Accrued liabilities 40.6 123.0 49.8 (17.0) 72.1 81.0 72.5

Employee related obligations 3.4 0.2 13.7 2.0 - - -

Accrued taxes on income 166.1 (82.9) (26.7) (6.8) 18.7 13.9 15.8

Other liabilities 115.4 85.0 (22.7) 49.7 - - -

Separation Costs - - - - (312.4) (222.0) (59.5)

Trade receivables 40.2 264.8 (303.1) (142.0) (159.2) (89.3) (101.1)

Inventories 180.0 108.9 (76.8) (582.0) 268.9 105.2 33.6

Accounts payable 2.6 154.0 330.5 52.0 23.9 83.6 63.7

Net change in operating working capital 222.7 527.7 (49.4) (672.0) 133.5 99.4 (3.8)

Net cash (used in) provided by operating activities 3,443.1 4,003.7 3,077.2 2,407.1 2,821.4 2,953.0 3,267.5

Investing Activities

Purchase of property, plant and equipment (288.9) (229.0) (294.9) (374.8) (416.7) (482.2) (504.2)

Acquisitions, investments, and proceeds from disposal of assets/businesses/investments (1,866.1) 145.5 123.4 (14.9) (375.0) (500.0) (750.0)

Other - - - - - - -

Net cash (used in) provided by investing activities (2,155.0) (83.4) (171.5) (389.6) (791.7) (982.2) (1,254.2)

Financing Activities

Proceeds from loans and notes payable - - - 14.3 8,995.0 - -

Repayments of debt (40.2) (11.4) (7.0) - (482.9) (202.3) (188.0)

Net share issuance - - - - (72.0) (198.5) (238.7)

Dividends paid - - - - (774.1) (1,571.3) (1,618.5)

Net transfer from (to) the parent (1,090.6) (4,052.1) (2,735.7) (1,478.8) (9,913.0) - -

Other - - - - - - -

Net cash (used in) provided by financing activities (1,130.8) (4,063.4) (2,742.7) (1,464.5) (2,247.0) (1,972.1) (2,045.2)

Effect of exchange rate changes (10.6) 8.7 (40.6) (61.5) - - -

Net (dec)/increase in cash and equivalents 146.6 (134.4) 122.4 491.5 (217.3) (1.4) (31.9)

Cash at beginning of period 605.4 752.0 617.6 740.0 1,231.4 1,014.1 1,012.8

Cash at end of period 752.0 617.6 740.0 1,231.4 1,014.1 1,012.8 980.9

Free Cash Flow 3,154.2 3,774.8 2,782.4 2,032.4 2,404.7 2,470.7 2,763.3

FCF Conversion 153% 140% 103% 79% 100% 101% 103%

Source: Company reports and J.P. Morgan estimates.

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

52

Andrea Teixeira, CFA AC

(1-212) 622-6735

andrea.f.teixeira@jpmorgan.com

North America Equity Research

29 May 2023 J PMORGAN

Strong, Global Management Team

KVUE has a strong, seasoned management team that will benefit from continuity as

many of the c-level executives ushered in the strategic transformation beginning in the 2019 time frame through the IPO. Moreover, the consumer segment largely operated

independently within JNJ historically, and as such, even after the separation, the organization should be well positioned to continue life as a public company. The management team has around 18 years of experience in consumer goods and healthcare on average and is a diverse group including over 58% women and representing nine different nationalities. Below, we highlight some of the key members of the executive team.

• Thibaut Mongon, CEO – Mr. Mongon served as Executive Vice President and

Worldwide Chairman, Consumer Health at Johnson & Johnson since 2019 and had

been with the company since 2000. Mr. Mongon joined the Consumer Health

organization in 2014 as Group Chairman Asia-Pacific and prior to that joined the Pharmaceutical sector in 2012 as Global Commercial Strategy Leader for the Neuroscience therapeutic division.

• Paul Ruh, CFO – Mr. Ruh joined Johnson & Johnson in 2017 as Chief Financial Officer, Consumer Health. Prior to Johnson & Johnson, Mr. Ruh held several financial leadership roles at PepsiCo, including CFO of Latin America, CFO of

PBA, and CFO PepsiCo Foodservice. Prior to PepsiCo, Mr. Ruh held roles at Procter & Gamble and McKinsey. All together, Mr. Ruh has over 30 years

experience in the consumer goods sector.

• Jan Meurer, Chief Growth Officer – Mr. Meurer joined Johnson & Johnson in

2015 and most recently served as Global Head of Strategy, Consumer Health. Prior

to that, Mr. Meurer held the roles of President, Johnson & Johnson Southeast Asia and Area Managing Director Central Europe, Consumer Health. Prior to Johnson & Johnson, Mr. Meurer spent time at Procter & Gamble, PGT Healthcare, and Siemens

Technologies. All together, Mr. Meurer has over 25 years experience building

consumer brands.

• Meredith (Meri) Stevens, Chief Operations Officer – Ms. Stevens joined Johnson

& Johnson in 2015 and most recently served as Worldwide Vice President,

Consumer Health Supply Chain and Deliver. Prior to that, Ms. Stevens led Supply

Chain Strategy and Deployment at Johnson & Johnson. Prior to Johnson & Johnson,

Ms. Stevens held roles at Newell Rubbermaid (Chief Supply Chain Officer) and

Tyco, Bertelsmann, Knoll, and General Electric in operations and procurement leadership positions. All together, Ms. Stevens has over 30 years of operations

experience.

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

53

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