BLCO - Earnings call transcript Q2 2022 | Bausch + Lomb Corporation

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Operator

Good morning, and welcome to the Bausch + Lomb's Second Quarter 2022 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Art Shannon. Please go ahead.

Arthur Shannon

much. very you Thank and call. our everyone financial quarter results conference welcome morning, second to XXXX Good today's are on Participating call Mr. Chief Executive Officer, Joe Mr. Officer, Chief and Papa; Financial Sam Eldessouky.

addition section. will be of on our a a In the of available live Investor under presentation Relations replay call slide and copy conference this website this to today's webcast,

the a contains We would at ask Before we remind of to statement information. like beginning read you that forward-looking you measures. as forward-looking important take moment presentation begin, we'd our to the presentation contains it today This information. our that non-GAAP legend contains financial presentation

website. For presentation. please Non-GAAP more refer the measures, be the can our of in found two presentation information reconciliations the these appendix to about to slide on posted

presentation until With public the affirm quarter update to to turn Finally, as our guidance through the in Joe. effective call other is over It to disseminated is financial of following guidance to disclosure. only. guidance generally update than that, pleasure or policy it this is my and not not today the broadly

Joseph Papa

our you, an for business briefly Thank some quarter and Eldessouky, Sam thank then discuss our about results second will begin I review Lomb Lomb the earnings Bausch care second everyone guidance. financial you, call. will for joining detail us + comments quarter highlights. Bausch integrated XXXX second Art discuss eye quarter as today + the and and our CFO, in

an months. + the be and appropriate as take But to before quarter, we will time two the Finally, a Chairman the to I IPO talk leadership. will conclude is questions. transition to month, announcements. + product Last address CEO down coming of the Lomb would Bausch upcoming discussing new by we completed Bausch before it moment like recent I opening of announced and our line for pipeline to catalysts Lomb, that about I in Having stepping

the better. is to of incredible part employees leave thank Lomb to Bausch I have of better a to First company's are dedicated honored and mission to talented for our and live who Lomb I'm Bausch + that continued this history, knowing see well-positioned success. foremost, will I all want of been + people helping

XIFAXAN a Bausch is Norwich the Second, decision matter. Health

not Health Norwich it. will on on We next discuss earnings Bausch the week. comment call decision will its

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to Lomb company. a for an as slide We number opportunities five. eye of health + standalone Turning see Bausch

driving and eye large, of under durable in times an middle driven age such and increasing that eye more mega-trends expected XX tailwinds a myopia are for the products. health demand First, to continue growth population favorable markets those that aging of than or well-positioned utilizes XX-year-old, class patients and growing health we the diabetes new is company prevalence the and by believe for products as

margin we supply chain over have addition, launches long-term the on In the expansion efficiencies. product new based and potential

for I recent later. more announcement have solution, in flexibility to as balance expect detail we in surgical company, sheet will business such product expand glaucoma opportunity, in traded publicly investment a to additional which strategic a the Sanoculis and as Finally, bolt-on discuss our

Moving on highlights quarter second now six. slide the to

revenue organic quarter second strong a to contributed of achievements Our growth X%.

grew We portfolios. shares great market key quarter continued had the their in First, high the vitamins quarter The is new reaching basis in share performance franchise U.S. franchise Biotrue quarter. in in eye the XX% consumer increased for record by all with XXX two by and market Solution the second prior expanding points with to second the launches we U.S. Solutions Biotrue compared LUMIFY underway. year have momentum

fast-growing XX%, product at a reported launch XX%. category we with continue revenue grew potential in in Daily investment for SiHy And of significant the finally, contact, global more And approximately lenses Next, new SiHy in expansion. revenue we see early categories, to expansion. CAGR the growing quarter. by XX% grew by second the Reported as stages in market of growth the countries. Daily We're LUMIFY the approximately brand

launching are patients. more with to potential treatment customizable for family filed we of meet the dry Revive, NOVXX, contact a of And eye needs a designed first-in-class soft through associated second NDA new results execute Meibomian our eye We June, for of dysfunction. our brands an strong disease gland our demonstrate the care of in goals challenging drive quarter ability continued and conditions team innovation. To economic durability summarize, the our advantage and platform, the to our of lenses integrated

as to And faster market. we financial opportunities health cover is now turn well-positioned that eye company, large, eye standalone As in results markets company and in growth Sam that, more durable for future traded that are the over with than an call the a publicly to detail. for health I'll to look the categories in growing the many we overall see

Sam Eldessouky

Thank you, Joe.

currency when talk mean into get revenue I organic we divestitures remind to that of growth, we the constant we remove a the discontinuations. about Before impact and details, adjusted on listeners basis will and

quarter pleased to slide growth. on Turning of now to our report another We're results organic strong seven.

as to by X% reported continues revenue up second on demand $XXX reflected key total up drive company and of quarter, basis. markets, across X% for million business our the and franchises our and platform, China organically The portfolio approximately benefits in challenges, + of to durable a the $XX which including brand impact Bausch million of existing headwinds. high is overcome integrated Lomb's us diversified of recognition, the enabled currency demonstrating and with COVID Our macroeconomic inflation,

on in expect pleased in a performance products. restrictions franchises, a build within COVID consumer related the activity the Overall, in momentum us portfolio retail as to of economic continue our be resilient driven new leadership expansion growth disrupt surgical quarter China, Care foundation in and in improvement to we our market near-term, our While current growth our In we're gradual will Vision and launch we and that business. the mobility with have position health to believe we our limit continue accelerate by we're recovery allow U.S. consumer eye to and buying patterns. seeing very key

to our global footprint mitigation identify inflation navigate of leverage address the to continue will and the initiatives recovery. and impact target We cost the nature to of pricing stop-and-go competitive actions COVID

brand to in in long-term, execute our to transformation the to capture Over franchises, expect and of target sector. our differentiating the R&D future pharmaceuticals eye ophthalmic continue global mega-trends products, strengthen on the we new focus opportunities shaping invest to further and the investment portfolio launching our equity by strategically care

more Now, of quarter. I Vision lenses will the includes detail into in segments. Care second grew XX% contact which on Revenue each in and segment, our organically products, the go by consumer

broad-based Ocuvite redness to all-time vitamin driven up market we AMD. share an PreserVision franchise revenue by strategies. and revenue vitamins in U.S. with portfolio, Our to extension U.S. with international leader awareness growth of high recently by which Having launched + in is XX% new relief geographic of in reaching a organically, and reported The of and success expect launched platform LUMIFY which franchise through expand on South XX%, million. the demand. was line leadership gains position eye demonstrate build continuing saw X% in Canada. market us, markets to growth for The The grew increasing in also in consumer products. on and continued the an the reported by we to has prevalence the LUMIFY already resilience basis. the LUMIFY as quarter LUMIFY drive grew has a and with increase Korea, continues its expansion created market $XX eye

a in share contributing in in in supply and by The the robust the up expanded markets. launches. XXXX. launched is Next, Solution recapture U.S. to strong is growth X% key in in to internationally, is by grew in Hydration business Internationally, resulting new driven boost of growth U.S. organically market and XX% up Growth the was Biotrue lenses XX%, base and market We off franchise. strong international a strength in was Also the in Plus both organically portfolio Milan Biotrue dry saw start. lens to AQUALOX, a the recall driven challenges franchise, year. Biotrue launch the the saw by our subsequent markets. European which the share organically prior Multi-Purpose which eye line, U.S. hydration eye product performance from We revenue our care mainly

growth our driven double-digit lenses, China, in results COVID of the XX%. launch Japan. and SHIN lenses Daily in portfolio approximately and the SiHy recently ULTRA AQUALOX of core primarily brands, in impact international most continuing UV the XX% were Daily in growth with strong SiHy of grew global We're rollout Excluding Biotrue. the the The by organic

Vision demand. benefited is revised mitigate in portfolio. Care launched also in inflation, important equity have the custom from drive also lens the We building the margin help continuing our the of with the portfolio step out of products soft brand pricing to lenses to Certain an portfolio actions strategic which U.S., in higher impact specialty

products priced. We to will remain our continue to dynamics monitor the market ensure competitively

our onto segment. Moving Surgical

growth. implantables into the to was X% million, our we benefiting driven market implantables, international LuxSmart. reported by and from by saw the services. COVID Second of works was consumables, in Growth growth quarter grew premium category IOL from XX% elective our which organic recovery XX% franchise, the and reported $XXX X% the enVista as in organic entry demand mainly Growth backlog revenue contribution related through organically X% growth continued and through a driven saw and our by

Ophthalmic the dynamics of the Pharmaceuticals organic by revenues by quarter impacted an segment, the end basis. on tail $XXX products declined and in In market is in our competitive Finally, portfolio XX% LOE the million of portfolio. second generics U.S.,

taken was now in quarter, this for in countries. and VYZULTA critical by the We China, grew to is which continue XX about us the launch NDA The strategically a in ophthalmology up quarter. restrictions preparing focus we're quarter NOVXX portfolio. the to submission impacted second quarter, the excited and has a was approved been ophthalmology milestone. in VYZULTA transformation We're steps growth related U.S. of fourth by total in promoter market revenue We key in of also the in key outside continue XX% brands. of the Thailand launched The the on TRx marks Brazil COVID portfolio for XX%. international

funding half transformation launch recent our of of quarter, as towards the expect accepted be the progress the in pleased XXXX. portfolio XIPERE, seeing provide We believe foundation to will launch and a the with a and make also we the we're We the in growth. second with positive third Pharmaceutical product community. retina drive new We're strong from to response the Ophthalmic that launches segment

With million up in to strategy costs total company. behind launches our $XXX to quarter, now structure and second maintaining while stand eight. a cost continue in incremental the we Turning new disciplined of slide investing product of revenue despite investing R&D, the

Our second adjusted EBITDA the $XXX was million. quarter in

gross through XXX the actively challenges Our as basis We're margin change by enhancing and than points approximately inflation lower working headwinds, total related is is for price which materials. was as transportation XX%, mitigate raw well to strategic improvement in efficiency The energy, inflation to adjusted higher initiatives, quarter cost and shipping, largely XXXX. leading cost driven center increases. QX

leverage disciplined approach our a to cost maintain to infrastructure. and management continue We

Our costs. increased and year-over-year to $XX be inflation SG&A could mainly transportation of attributed spending million

our R&D accelerate in to sales focus increased investment as X% our ability to pipeline. roughly to of projects on in R&D continue quarter to high on Our execute the priority we

the EPS quarter for was adjusted Finally, $X.XX.

also second Moving be efficiency to management Adjusted capital macro inventory XX. headwinds. to the a from in was operations balancing working cash million tends priority, impact flow while key of quarter. the anticipate Maintaining on slide strategic $XXX to

sheet, investment quarter CapEx strong Second have which flexibility venhancing opportunities. $XX to us to value continues was provides the B&L a million. pursue balance with

XX. slide Now turning on guidance to

organic between X% of We for XXXX guidance billion EBITDA $X.X XXXX X% $X.XX in billion, $XXX to the revenue our guidance range maintaining and adjusted reaffirming million growth. representing the $XXX million. We're also to are in in of for revenue range

XX% We for expect to adjusted approximately be year. gross the margin

to prolonged. While initiatives, mitigating expect be the continue of inflationary to we we implement pressure impact

approximately rate which our interest interest anticipated We debt. continue includes impact $XXX expect of of variable the million, rate previously increases interest on expense to

of X% priority We year accelerate continue of also our we projects full increased R&D to within approximately investment R&D pipeline. revenue, as high

financial in we're Lastly, expecting XXXX, standalone than from to the growth results the with continue of resilience as We finalize to range our we post-IPO, X% the growth to In to summary, take BSC previous is business strategy. our from that strong of results and separation and which pleased required we're rate our believe momentum. of our and strong be in structure our QX on execute provide tax position XX%. establish capital our steps which lower guidance reflect a B&L X% to

Now back to Joe. you,

Joseph Papa

and a line the remains with care Sam. Beginning product XX. XX% the in this will expect the now integrated slide through we're LUMIFY and with pipeline using our catalysts in to the brand success of million-plus Today results. priority. that approximately geographically Thank I $XXX International Building of market eye you, XXXX, upcoming platform, in launching in the it product on U.S. we a category business expansion After became the to fully the redness May drive on and extensions. reliever of LUMIFY is planning our discuss brand power number expand share. phenomenal one XXXX.

We have in all and now launched pharmacy we're retailers in major Korea. South LUMIFY Canada, at available and

We and geographies in launches and countries. are multiple have underway planning submissions in other approvals regulatory

We for allergy LUMIFY preservative-free a area, formulation illumination, especially of control. product on sensitive ketotifen line for are a the and symptom working eye combination eye with eye care LUMIFY also

slide now Turning to XX.

brand franchise grew million reported quarter generated the global Biotrue quarter, platform eye dry versus the includes XX% $XX XXXX. Our of importantly, revenue second in lenses mega and second is and of revenue lens The products. contact solutions, franchise by contact a that

underway. We have two launches

the Biotrue multi-purpose Eye XXXX, Hydration second, original in Multi-Purpose the this Multi-Purpose solution Dry on the year. This we which in United First, and we Boost the and which launched in which Solution, a success is Biotrue Biotrue earlier launched number Plus product builds launched of were States. Hydration the one Solution, Drops, XXXX

basis first Importantly, market and XXX the to quarter the compared by to continues share, XXXX. gain more Biotrue solutions importantly, increasing grow family points of

year-over-year slide of the revenue months. lenses Vision at XX% these in on Care which look by basis grew a portfolio generated broader sales Beginning lenses, million take and launched Biotrue Let's XXXX, the Day on with $XXX XX. XX over One organic trailing an of

Next, launched + the grew these from of lenses over $XXX Lomb organically Bausch in of generated by Reported we XX contact revenue trailing lenses XX%, sales have XXXX. million ULTRA months. revenue

those SiHy CAGR global market we million. segment are available Finally, now ongoing be approximately and exceed important up our sales toric market of an for a At to a launch the of our Daily customizable worn expect vision realizable XX%, slide approximately expected featured including in family XX% have have specialty daily the options our lens SiHy with $XXX provides newest lens portfolio. patients, up the providing multifocal contact on months. which of to lenses or is solution Daily driver with three high in basis. multifocal lenses, of These lenses, and to Revive unique X,XXX lenses customizable soft SiHy XX, that available can new growth for peak higher lens relaunch On is a toric, a also growing contact the the and we for that goal prescriptions. business of to more the a are a reported Daily margin individualized fastest Revive structure. the with contact lens range soft addition to of correcting spherical, broad be

we we with patients with unmet If vision X have NOVXX, new The demonstrated studies. in safety slide to half treatment expect endpoints mentioned and eye tolerability for gland significant XX approved are NDA XX, first-in-class for associated charts meibomian for solution slide second in launch the efficacy -- this a We statistically June X dry disease submitted now pleased XXXX. shows dysfunction. the Phase potential for second On as I offer to earlier, been for NOVXX Phase by FDA, two on of the efficacy, the in Consistent trial. needs.

is Dry with a patients prescription one and fast-growing a Americans achieved, eye This XXXX from XX found grew at Importantly, disorders statistically one patient day meibomian approximately baseline of CAGR XX. the market million with disease to disease study XXXX, dysfunction. early needs. dry XX%. most were gland affecting market had XX% significant endpoints and all primary approximately is approximately common secondary eye unmet that U.S. ocular including the eye dry as changes of service of as From

market business. company's the have Given we XX, an the On future treatments our we investment Sanoculis we dry these expanded in has results be option and and driver the the making disease that Phase announced of equity current trials, potential X our that to to NOVXX for major acquire assets. growth portfolio by two surgical slide believe a

into Sanoculis need simple XXXX, minimally XX.X procedure an in XXXX. for by entered and part with people is glaucoma. the agreement innovative Globally, XX% lowers pressure a and by to European surgical MIMS is surgery. also intraocular that expected the without exclusive approximately We fast had invasive treatment glaucoma for increase invasive treatment effectively distribution of for that stentless million glaucoma

a base. to more better meet health lives, market all eye treatments unmet long-term fills transaction landscape, patients as portfolio slide Bausch of summarize to our new near-term retailers people and and eye great To key health XX, consumer see XXX opportunity meet reach portfolio. clearly to needs. gap in offering their the surgical that Bausch developing a the and company a business our we live integrated Bausch and for products eye Given care throughout of better. consumers and the represents Bausch phases Lomb on + believe comprehensive surgical in operates + + Lomb the company. well positioned our e-commerce to help health with severs Bausch brand health professionals + eye needs eye that channels is Lomb Lomb any relationships has has and of + be eye where broad patient is a longstanding significant Lomb awareness fully ecosystem care highest uniquely consumer offers as than needs.

Our our second the quarter of results durability demonstrate businesses.

continuing in generate investing and expanding our key momentum products, focused remains team into on Our fast-growing categories to new product in categories.

as With believe is Looking success questions. up we eye that, + for line Lomb standalone health well-positioned company. Bausch let's continue for ahead, to that a open operator, the

Operator

from now the your Joanne from will question line question-and-session. go the comes [Operator Please is And Joanne, ahead. Wuensch first Instructions] We live. begin Citi.

Joanne Wuensch

on you thank revenue are strong of just you and two despite Essentially, EPS, there taking quarter, morning the Good particularly question. and One, them. the guidance. reiterated both for second

So, And question is, you and is takes or hold I'm you Thank ophthalmology up experience that second than my the is I'd there? it you. then -- sort recession-resistant. do on curious that take you think could curious products your portfolio, of and put my fairly better are get if what view that which be others? lens

Joseph Papa

good very questions. Two

look to we we as are our seeing year, with of our half second year we optimistic So, performance. are of the what in business in the half the second

clear. said there there our we absolutely more out to So though, about them that, think make we a half Having that right second now as that sure number understand we is part of about guidance. trends that macro want are just

of what especially that how terms inflation, the Russia/Ukraine see COVID costs, to recovery cost issues issues example, managing energy geopolitical some that it because the the means that Europe. we for and relative of in we energy For the are in in of see we China, invasion

make optimistic was business exchange, our So, all we those thought with inflation. performing, this at thinking want those foreign factors exchange. consider that, cetera, as absolutely through And we thought sure also are in thing foreign what we is things. et we're time how and we to happening about we We're through but

reason why the our our in reiterated guidance, business. very we optimistic but So that's

through through looking it portfolio well I think the -- As recession, terms lens. relate very said to of our the at you would in of it question

believe want as the they looking most going the being sense business the possibly are to health are the ensure can. that people eye for that best vision they sense to a is at that we get that people. care business in what We continue it relatively to recession-resistant as health is vision important And is

it the So, plus historically. there, something through XX% consumer fact the very, we most very as that our that is think as we've X%. our in seen overall that the gone We've that, looked looked business business especially at growth. we've was had business, and Contacts at recent strong do you've and is quarter, out

to growth we're business. all some felt the that in see seeing still through a thinking for we're were in need COVID And are challenges back The strong as indicator looking surgeries million the and is being surgical of up still and some beyond. make to overall XX XXXX, it approximately So, surgical course, To of comment to I the us is business. of plus we of and XXXX going cataract will also backlog only going very other of the because believe we we degree, happening XXXX there into get caught and XXXX. X%

all are recession factors think recession. question next period magnitude of please. time through the continue performance those the to So, be going we that the are drive going Operator, the to overall on depending

Operator

ahead. next is question Robbie, coming Please Certainly. live. your Marcus JPMorgan. The go is Robbie from from line

Unidentified Analyst

puts This XXXX? should Robbie's are the Hi. bit you expect other talk on any be quarter? and the and you how balance thinking quarter rest over taking about And actually of question. you're there for in the fourth mind about for team. we is the takes normal third of cadence the Lilly keeping Thanks Do seasonality year? a from Can in

Sam Eldessouky

is Sam. Hi, Lilly. This

a Let me good -- it's question.

the addition, with at Joe to question, the to look in what nice in half first business and business in our already in on we've with you half, which I'll consumer eye very category redness seen the LUMIFY. momentum momentum the half, growth is we've seen in first So, in maybe other have our the second than covered be the stronger when what tends build

vitamin with PreserVision. + Ocuvite also the in saw We category

that momentum, that carry and seeing forward we us. with we're we expect nice So, that

seen good was launch have first Daily it half, the lens, momentum in SiHy we the the very of with On up QX. XX% also in

through the to go work we second backlog, forward And on we'll into to expect that. surgical, continue We where as the that continue half.

couple we seeing chain, factors, and we're Bouncing go market quite the been elective So, inflation, between as currency seeing, currency front. conditions macro think that volatile. has in environment of us benefiting been the those on the geopolitical I and surgical we've all forward headwinds the surgeries with growth surgical the the supply

really most the half. factors the all half, that's outcomes bouncing the bouncing about second about those really tailwinds think in But call than we've scenarios, thinking headwinds to we half through be and first So, it, be, of half, we half the working headwinds traditionally, XXXX. you potential go we about second and seen better to cautious how essentially thought the as have second the different second it as optimistically I'll as in macro but we think forward about those

Joseph Papa

Operator, next please. question

Operator

line The from Craig next Bank Bijou from is coming live. America. your go ahead. of Certainly. is Please Craig, question

Craig Bijou

Freat. on Good color provide on if little you a are SiHy. then, where any had wanted bit could more your if provide on guys. growth. ask sales a color to could you're you where wanted to I also guys morning, few Daily SiHy see I directional One, seeing And today? I

Is in of you how much growth Bausch + the from the the And have do just then, new users use SiHy for it to sense it is cannibalization a growth is of So, you growth versus that Lomb? U.S.? entered? markets international

Joseph Papa

questions. Great Sure.

try Let take sure make at time. them to me a one I

SiHy SiHy, we're with with with on start seeing SiHy, the the ago. happening the been lenses, We've we're our sales it's I'll lens infused of where for to pleased Daily of SiHy seen world. versus what rest active number I'll -- if just you First, the able the that very U.S., fitters get actually but the a then double of it year we've the to

just year actual the is So, fitting of docs, now optometrist versus a quarter that number ago. doubled ophthalmologists same are

also we about mostly SiHy that's call data, Daily We're market. fit we our sample, share which the We're seeing it actual is to have overall clear. actually where clearly, the a set, XX.X% U.S. of be that So, that. seeing

important U.S. this do we that's to want everywhere up -- ago, data. sets still not a clearly, want have the but them. will are launch I clear. year XX% we versus about once be have fit and to So, we We that us. again, fit They more set is absolutely

As in XX to launched. Europe we relate XX, that had the We're the early launch, XX very up it very, countries we've is international countries doing the but launched. the international XXXX, end now well. now side, would at gone very about from of somewhere team in is already

to seeing as a Daily us. U.S., geographic overall the out brand with as is to on into we're product. building for very the had go So, international ULTRA ULTRA nice SiHy Outside the that planned marketplace expansion ONEday, we the team of referring it

As it was from. coming the here the really is the it data next to product relates the the of have best source question, business. where source I in U.S.

very news important terms launch, things an pleased on our the lens launch for and We we question of X% us. did from Biotrue reported point it that seeing large in reported to of The us demonstrate about a favorable we're ULTRA, cannibalization. percentage a it least is SiHy Moist, coming something DAY starts, are the OASYS, the pretty ACUVUE We're news seeing of -- We good seeing at significant very this that we're not ONE new much Daily share amount I'm was of in players. good board, from is a think Daily of which still total Also, to what the growth. we're the up is is from monthly that from terms the which across revenue those see showed the seeing. we're cannibalization X% growth picking that, notwithstanding one coming is, one the going make

the as seeing the clearly, in So, we're promoting existing growth products. INFUSE we're the lenses before launching that been we've

product still term as mentioned million terms about the and of XX%. seeing about the was the -- revenue But We call, over growth we're we opportunity what during excited So $XXX the for be INFUSE in product. our will over the we're believe INFUSE growth. long

you Sam, you do have anything got think want add? I I to all.

Sam Eldessouky

No.

Just ULTRA, Biotrue you those currency Craig, because big look also on and organically on a have the impact products. if is at it

and at two you look products, grew organically, both those it Biotrue if ULTRA So, double-digits.

quarter and the ULTRA is So, of XX%, organically. up them XX% both in Biotrue is up

Joseph Papa

next question please. Operator,

Operator

question Wells Fargo. Please next from live. coming The is Certainly. line ahead. your Biegelsen go Larry, from Larry is

Unidentified Analyst

for Hi. This Charles on is Larry.

through First, talk thinking some takes I it or be preliminary launches and maybe wonder might if congrats might new be wondering numbers, that about product -- on to of LOEs headwinds on of know a might if nice some quarter. you might XXXX. or in different and inflation, puts you might able thoughts able I but to tailwinds premature you be to give talk absolute to FX, terms consider? the be

Joseph Papa

to and some want Sam Great it. I'll comments may Sure. And additional on put start question.

really in product than as to faster going but I momentum about microscope. plan lenses, an invested comment not the importantly, that our continue the categories we eye we health are SiHy to And categories, important in that IOLs, the very comment simple. can doing all future, our digital then the that the is disease. as grow So, we're example. new things think We've current quarter obviously we're straightforward, to this dry I the portfolio, we the very think think important as Daily market, overall like about, advanced the things yet, think things XXXX like is going We premium guiding eye the talked

this in going are terms business. us we're those for to how factors at So, for strategy looking the be growth of the

products, the be also then surgical be as good Continued lenses. much in toric VYZULTA help great product Biotrue for very clearly, vision their think off are NOVXX continuing going and challenges is going the solution multifocal geographic It's them that the really come -- for But allows the with be digital questions of the with that's patients are We're launching in And what we side, was that the and is grow XXXX, the to to going momentum, importantly, importantly, XXXX be about is and give the which all I continued formulations we're advanced to is innovation you and ophthalmic innovation designed new going to get faster rolling new end the then It's it's of clearly, have answering be categories prescription the on we're at clear all we'll the growth heard to LUMIFY then continuing XXXX And the products we lenses in we're investment in generate with to looking XXXX is multifocal could Revive highlights. which continues of dailies the toric of story for now. able INFUSE yes, then products, haven't we've is of bringing be is good at margins able now going we're think at to but LUMIFY us. look growing for LuxSmart give many continue haven't portfolio over. world to the be the we've XXXX, category new customize eat and looking us forward market of but XIPERE the to to at patients some needs. And product spherical, the the -- we've the franchise, is Revive unmet filed kind at. one a the then XXX new the the for transform that ophthalmology, new that than look the of unmet where products. on microscope, us. product. into the the One which lenses, we from I where And at Revive. introduction customizable talked optimistic comment to with taking seeing going we've in them Biotrue to vision a excited be the of question, launched is been side, And to that vision about largest We about to on marketplace I Multi-Purpose the comment with people the us, going well. them them expansion our category had needs us plus consumer that we're on their news to they about other the lens for side to contact product go we've going to out. about, Final portfolio. enVista do out we're past. in talking we're future. forward help the ultimately, then expands think to to got June,

tailwinds key of but the I anything want kind those add? So, that Sam, to are see, just you

Sam Eldessouky

No.

and impact seen as big think into in of about million. about it the and forward other us first that's we currency at how we could business We've million see -- $XX of also We've next elements year from for think from already you second in seen that $XXX impact half the really the fundamentals go impact is which the guided roughly you about When I -- come through half XXXX. year. here, future XXXX a factor. currency into is full

So, the there's to and we that still volatility currency, continue. expect in

in guidance, look about guided also the we -- basis of our at inflation. factored signs. points think, We on inflation. roughly And I the impact we're an we seeing XXX in

we've as many and into inflation Although more probably seen you XXXX bit manageable, is of steps of beyond. we're the impact to actions and taking mitigate it's from a prolonged inflation through the but little go

going key factors factoring our XXXX. we as are about here we're that into to are very those thinking think to So, continue and closely we watch

Joseph Papa

in So, sometime our exclusivity be is talk the product one we XXXX. through going new And what's [indiscernible] worked to to we'll of going things a happen the good late is product point are Loxo continue think to that that's which out exclusivity, about We only I as launches those Loxo that important. will there way about are XXXX. one.

many front headwinds. feel with So, the in of the lot we tailwinds a that us, we of are of dealt that

question we're of and went Operator, you next what out as So, all shared excited the we did we about as IPO. the we please. for see future with

Operator

live. The Please is next Bank. with Zafar from your question go is line ahead. coming Deutsche Imron, Imron

Imron Zafar

question. very taking much Thank you for my

the about business? in Can terms you're question like? maybe environment constraints is capital First supply on just Thanks. spending business. looks what the the any experiencing within to you talk surgical book order that extent And then what of

Joseph Papa

Sure.

surgical start + me the Lomb Bausch business. let So, with overall

consumer we also the our we growth did nice some in and quarter, Importantly, very see plus this during -- business XX%. plus XX% implantable organically,

growth By So, grew we definition, about X%. nice though only very some there. total our saw

has way to we consumables the So, saw is the answer the spending implantables you what there some that and probably can -- best question. lower capital than in see is is that

say, we've want As supply chain continuing has I supply global are first foremost job been done outstanding constraints to There the the to out real team through an questions. constraints, working supply there. on work to our and through these

things are that, working job microprocessors outstanding happen the our done device of that and all an The everything surgical through from part a a I that done is to quick comment. just of help through us team fair job think has things, the side. it. has great team But think

in we that see have investment try some question. work will that to help inventory through made You to us to

distribution has And to constraints inventory, here are action The to just But a to So, to work building get done through in more is this. inventory through B we've it. parts position. some put taken and hand, the this get. we like ensure taken some A the logistically. we can be the But on through job. some point is to team steps microprocesses, to steps are clear, just taking we point just some think best some great working active to like And longer strategic other which ourselves there difficult supply that of from have are

Imron Zafar

addressable for launch custom quick needle Revive. XXXX you. lenses that and just question one you then, Can remind us and could level XXXX? Thanks. is Thank Okay. And in on product be opportunity what the moving

Joseph Papa

Yeah.

not have the We're in want a the available I just you have soft specific to overstate a it for spherical, the view, this lenses near-term. they So, unique it very previously long-term, customize toric, people chance where get was an need a customizable where the give a us diopter ability point the just the in diopter or individual lenses things ability a them all wants all high to who can just multifocal flexibility previously we toric, lens really available. the multifocal, contact prescription. that that as from issues for custom in because think soft had product, making and that do have But they not patients make will and much patient don't more opportunity it problems the of to for

I improve do see to what So, have we're being going we're to lenses, problems. the money of term, help happens lenses, do to think their And to to to us patients see Ortho-K. for Arise, who vision chance them. these those want are a believe. other that are these in help to be complementary because lenses going important meet the spend very the XXXX think think XXXX, the these many over of to this we to Longer it's with not Zen patients I as we'll or be slow the a patients We it's the our uptake, so types but RTP vision access doing happy that, going big because excited see have be going we needs are I it's all it's that time, very its things but that the to about.

Imron Zafar

much. so Thanks Okay.

Joseph Papa

Operator, question next please.

Operator

your The live. ahead. next question go is is Yodo George, line coming from Cowen. from Please George [ph]

Unidentified Analyst

and so quarter. congratulations on question our the taking Thanks much for

more So, maybe broadly just margins. on the

incremental from thinking are some because be you of And all? activities you're what some how the could but on maybe XX% on business? then business this going talk of Like that And come comment And that how should the we ownership about are margins about has your the investments might your that? R&D year, some business, impact could BHC the restrictions potentially that about at making spoken if what the of the limited you can of forward? focuses this be of You've secondly, investments? if

Sam Eldessouky

on through I'll to start the -- let thinking me maybe And just P&L way to about margin year-over-year, inflation. my going pressure so when start margin you of going about start gross George, margin, then the margin. points. gross think margin I'm XXX with of just with here. impact the to work is gross that I'll from I'm -- you and gross really EBITDA. the And coming Majority seeing down take we're basis

beauty we is because here tend the flip launch, earlier, Joe but taken actions as you mentioned we've coming inventory, So, as well our improvement. as supply up buildup go lesser you're on of To pressure your offset the a product of products, points as basis it to contribute the build you elements it actually, strategic and we scale does element chain seeing to forward, But inflation through that also still seen were factor through the about mix that -- a new launch and does of pricing margins. because XXX have up of you margin plays the many in short-term as through inflation. it extent, it and

you and us the see -- you where within So, that I the that as We year When think not because you're benefit go be as same infrastructure building standup for up get of infrastructure EBITDA in launching. you pivoting talked a that a also you products level those able have actually you Factor go incur improvement you're go of the the the going XXXX forward, you're on buildup B&L. a you short-term it's forward, the to on to year year-to-year of more And to you'll couple inflation is of basis, a here. factors margin, the think pressure forward. factoring as about see you'll but fact that company. about the

So, margin you'll and expansion as forward. be you margin go see able the that to

out and exactly as So, seeing play out as of as planned the the in we and that first for to we of our the exactly forward. we we're go play year half rest it plan XXXX, expect

previously R&D increased -- to We we're excited. was our an about We're the we X% half And in about R&D which quarter. We QX. what probably upped In guidance going look we higher we projecting X% the ran XXX basis in X% year, to communicated, of this our X% terms QX. another be about investment investment, X% ran X%. as sales. of than We That's second X%. of we're had to about to points

and it excitement of full our of that many with And translates and now Yehia. has higher us. charge we're you're that. the expense R&D Dr. to investment have who accelerating the seeing We able market pipeline into about Yehia be level project really bring to taking key within and R&D. to excited He's sooner, joined

and to is about forward, good range probably expect as think a to be year, X% the more And asked X%. Ophthalmology around pivot the go which towards you we within probably investment Care for our focused this probably We We are surgical. to segment. still going mainly focus followed the Vision leaning the you X% is R&D then our the by in surgical category product investment to

last So XX% terms priority had of And two that's in then the the the of question restriction of one you them. of the ownership.

We restricted we sub a still a are as are of -- BHC. just reminder,

see type that on operation of don't However, really, having we restriction day-to-day. impact any our a on

freedom operate businesses. of investments license you've as first in have full already investments terms number half different the the to in or we we've either that seen do So, and the still what in the we've done we've partnerships done through of that done

to flexibility the So, and the freedom seeing we're operate.

you from I else have want add? anything seeing not you know of all don't to at much we're X%. if restriction a So, the

Joseph Papa

care incremental thing with Sam, which eye lot now you of a is in picture into difference believe advance companies, No. that the R&D think at projects why answer the a we've focus and will I a put make I'd investment. what what the B&L. on good really the we answer importantly, view of we of what that But add to that you're more I lives of advancing the Maybe Yehia And believe, focus B&L to seeing, has only a reasons that's we're the one was well. the patients. we're working point projects Sam been at is able think comes the business I from that a on because it more very big it separated answered that,

just is the to I once that get comment do really again, that, you example it's The terms in out some said that's B&L I focus the what So, about add comment health an be only going as an now to the new eye think as of that, of of other products. company. Sam separated would margin

now that seeing opportunity a products, making. bring Daily as these have I more and is importantly, get a new type But launch we that new and then was year that company margin these capital to for example, the the our second business. have years lens to equipment we percent that part XX-plus B&L XX% yield the we three from XX% the yield the that focus separated I also products. the to an do that yield in four, to And the to as we're again, that of we in help forth this think back move And that we large have. from think Sam SiHy continue comes better XX% to we we As first year then going to experience in once with yield to of a the the as get comments expect

Unidentified Analyst

so Thank much. you

Joseph Papa

next Operator, question please.

Operator

Markets. Capital go Certainly. from live. The coming Please is ahead. next Doug line Doug, from question your is RBC Miehm

Doug Miehm

much. Yeah. very Thanks

Just a number. could bit quickly unchanged fully you of this a one, like all for now items. housekeeping chat is couple also P&L burdened guiding standalone lower Number quarter. looks It costs? being our then an maybe just you're And little maybe CapEx to about

there. transfer a are own of company. finally, housekeeping they the is And over did and What necessary bit recognizing mechanism by And XX% still then the leave that which cash, two those items. could need if it in future. they in the So, that the parent Thanks. more the I'll event cash

Sam Eldessouky

in here. Doug, let me order take them

with in cost. one, first the the So, standalone

you up year to standalone what about are XXXX. into compare cost guided $XX full last this the year we starting And year. as to for we is costs ramp the So, year, throughout said we standalone million

it So, look able about will probably you you and is standalone to at see you I it P&L operate what you company. the being when a at in think, right look now, think B&L, of as terms

factor us of year. terms full a for we guidance think our So that the about in caused how from

There terms CapEx quarter. is are about $XX CapEx, you this of million of In right.

reminder, about in a did QX. roughly as spend Just we $XX million

you million. So gives $XX about, it, that call

the a all million, it's about $XXX it key So, is is factor us. run rate to timing the from still like. But for

be or our of in we start did think that of of second here move the manufacturing, see not see year element $XXX what it, tend and the the of any there's we it terms supply of half. million. into arm that full will can cash to you Hence, of I to CapEx it, transfer. relationship the coming we a couple cash a we which because change That's to timing. as number send guidance generated, tied a There's BHC from balance is just terms part, where B&L between BHC for big and mechanism our That's actually chain B&L. the And And of projects I -- factors within sheet, in is by stays relationship there's no cash call an which million the cash submit roughly and length within to about the I'll or that's that $XXX is P&L. $XXX no, at cash about million. it's retained cash a see we cash us on last operations

point and length that of between B&L arm requirement an and or cash there's a BHC, we it's we independent an view. transfer So, forth sort no really that a back mechanism of established and

Doug Miehm

Thank you.

Joseph Papa

question next Operator, please.

Operator

Certainly. question ahead. Suneja The Yatin next from live. go is line from Guggenheim is coming Please Yatin, your Partners.

Yatin Suneja

Thank for quarter. questions good you. a Congrats couple of on A me.

offset what the able you XXXX, question whatever versus corporate then able So realize? impact? businesses where First, first just there about the you inflation talk level increase Can on on the of you've to done Are the are you least, broader to certain price able are other? that's to more And And are at you you in take percent level? price. pricing. at actually have leverage

one, Lucentis filing? any on Thanks. The second biosimilar update

Joseph Papa

Sure.

Let is. increase me start on in level the business pricing, which the

the maybe So, first general comment.

the second and was organic quarter, X% was X% growth X%. volume As the we reported price for quarter, in of the

comment. So, a price first achieved we X% increase,

inflation level. not every of pricing country remind our lens for took it almost products, situation pricing. what January, effect the done, saw of we it comment took We a Second make and of pricing. we it And We've relative took we -- you single mid saw in did take in to looked world. pressures think contact an products. I'd on as around our leadership In that the where issues take is the digit the prices where we we it inflationary we've was did vision those the at I and

seeing advanced occurred January side had So that the especially notice until do is to what did in give quarter. consumer to the And although, price the pricing the second some didn't you're in quarter We why the in first same individual with actually realize pricing. timing, But the of -- we the areas, mark was consumer that's we versus timeframe. in it in really what the March business, of there customers. January, the the taken thing stronger some and

would it rest think this to thinking what was year year, of the As well. for and of your next about part as we're relate I question

looking We at are pricing yes. for is That additional XXXX.

certainly, year. side, be reflected with And there's what to this X% We for that depending the reflect the us discounts, on in of what expect we're inflation contributes I And sit I'd we the to some seeing side. cetera, on our our I today are there'll going forecast just it the looking the be rebates, take et price, additional on factor somewhere additional at as that. selling XXXX, think which not pricing situational of comments in will also that we look to would Obviously, at at range. for beliefs on the remainder XXXX. full Do pricing is in we to do look happens energy year the pricing the looking a at that least pricing have how but here call I is we're that in all

done our To expect by be As Lucentis it resubmit But be to the to that be expect XXXX. biosimilar yes, of Lucentis partner. relate resubmitted to by we of end end that's XXXX. do clear, to the by biosimilar, would we do the going

to I add? Sam, think anything questions. the you I do got all have

Yatin Suneja

you. Thank

Joseph Papa

question Operator, please. next

Operator

Furlong The Cecilia, next ahead. Cecilia from is with question Please line go Stanley. your live. is Morgan

Cecilia Furlong

then talk you question. thank balance I a you outlook And and training? rollout terms down for where business that a other what you. just overall? been on seeing On of year, just the are the to perhaps pressures, the kind your growth ask, the higher limitations in bit you are really, about XIPERE, what morning could wanted your level macro question. either of are surgical this Good taking just for dampening Thank greater of could in surgical have in staffing procedures today side, of

Joseph Papa

Sure.

what for meeting it XIPERE. a very had surgeons a was in talk very we're I seeing We and a chance I opinion guess, their excited first, strong. XIPERE So, to to was the we're to leaders, retinal with ago meeting, about of opinion couple They number key York -- the New key now. the City reaction of annual weeks had leaders very, of

code, We now is in now have reimbursement which the a of XIPERE an that part of is received J side hand. important

and want treated the in we're uveitis So, the about though, over patients States to somewhere annual edema these in XX% patients. effects prevalence for don't United of XX-plus about macular very XXX,XXX play of sense the excited. that patients it, I around

now we've I'm suprachoroidal of of done to about opportunity. what been you very where for call what has just thinking we deliver received. So, obviously, one the opportunities the the it space not the And we concept eye that is eye gives medications some next we're platform sense can using with as magnitude. to well but But a space can the with suprachoroidal it additional go to XIPERE, going use use this the of

you key go very these can't the what blind. about and in leaders So, excited. seeing We're help seeing which, potentially unfortunately, patients, these could they talk initially if they're opinion seeing reimbursement. We're helping patients, it, like they

So, very terms our in to the we're in obviously, we're what response seeing product. launch. early, in But excited of

the cataract this specifically this it. as as There of people in into million because to is surgical XXXX still of cataract a on have of have with cataract business. we've we remainder a is surgical the of earlier, of think, IOL get opportunities the issues we're To new been the side, issues mentioned But problem, side I but there being had and That There COVID. business on clear. future -- question going this got certainly going notwithstanding we XX procedures, with what point, because what are XXXX surgical the tailwind part the of On COVID. the still delayed do for I see are that think for part surgical back Therefore, before. the world staffing the And be backlog, and could have to your globally absolutely coming some that is happened launching. about we patients in importantly, some the there portfolio we're innovation still the is excited And future. to help with LuxSmart more our enVista IOLs. our new to

question more here, two patients Operator, more time I have So, for exciting more we opportunities at we help to questions. as it. one think look

Operator

Vijay live. question from line go Certainly. is ahead. Vijay, The next Kumar coming your is Please from Evercore.

Vijay Kumar

about Sam, range? at Hey, the up points. myself to looks XXX, just the two-part EBITDA I'll headwind for the inflation assumptions so Joe. contact you've change the XX I I'm in not One, pricing the of it limit that one quarter. SiHy. quarter basis What range one end the like guys. on low pretty know should be in lens excited And was perhaps Congrats worsened to we sure been guidance, the on if question. China singles? Daily looking lower XXX of

the maybe of about So, some drivers here. talk

Joseph Papa

Sure.

Sam Eldessouky

Hi, Vijay.

question. actually parts of the two -- first me the take Let take I'll the

think as basis the you to it's guidance, flows points you through XXX impact really like So, an how about the think on you the that when about and said and about inflation EBITDA.

to as working that of all we that is spend that it, going through. the taking, are disciplined growth the One in cost the I -- would through things all and Everything refocusing we're are to or terms to structure. we taking structured as that's XXX spend And mitigate ranges that the and within on very to in else, sure from approach the coming of we're disciplined seeing be make seeing a of EBITDA to play XXX. to able are thinking, of the making really really sure feeds much we're be trying that prioritizing a what of able call into we're headwind we inflation approach

your that's first So part. on

had an China segments, across In our the quarter, our lens most in terms headwind business. pronounced the impact but three all of pretty much China in

think my seen we the when that when growth internationally, we've in you X% So, in remarks, about prepared part lens that organically. on talked business the grew

would have would XX% you organically. China, take about If been that

to significant. So, amounts is this the million The dollar the in is magnitude terms you the of the in impact range $XX in we've side impact international $XX QX. see quite an seen about million on that probably in of business lens

Vijay Kumar

Thanks Helpful. guys.

Joseph Papa

for Thank you question. the

just for one question, time have last We please.

Operator

you. Thank

coming is from Weiner your live. final Jefferies. go Zack Our is question ahead. line from Zack, Please

Zack Weiner

year? INFUSE taking I can you Thanks. thanks touch track Hey, wanted And later question. comments then, head on next discounts economic tougher any the year a content on the lens this launch into multifocal rest and the as give of year we maybe this I just on through, still potentially environment? for for towards guess, to

Joseph Papa

early on again, We're going Once the Yeah. geography of that the opportunity. we're into to year. a focus part the launch year, very lot this more end INFUSE to launch us excited next year, I'd the we're multifocal bit probably to multifocal. Look probably a next overall launch to little geographies more in going early it -- opportunity, with also addition of expansion probably

things is lenses. for One spherical lot great of of we're our existing a demand the seeing that

make to the multifocal, we've the we to marketplace that sure all inventory forward. it launch get want when we So, amount need and to moving got of the we

to early for this forward next of multifocal look of launch that So, happen timing. in terms year year, end

you was we've the actually question, that's been recession. working One been -- into to I the manage. guess, very much of comment asked going to or -- discounts the able see something been We've

terms mentioned say overall would I As I eye probably as of what the characteristics. we recession-proof, refer in or the health to thing before, I'd recession-resistant view

linked market So, some be to going compete, see course. contact that I and are we're price is some of that lenses input pricing a of the something use in discounts, competitive the oil. and It and like things we costs significant don't that But don't we especially for try to going incremental discounts. to clearly to of increase see expect knowing the significant all to polymers

what's as something manage happening. think about we're So, it's trying to that way our through we

is ourselves can INFUSE. we we competitive with out there, make look market our and new we're the think competitors our innovation to sure view and going at we stay that compete, especially on Our versus

contact patients cause have to We us end in. help way the entire is moisturizers to we still the talk they think didn't by comment I those something to number of other that have because had at our their wearing lens day. we found patients SiHy This One they the about, a the electrolytes, optics with and is clearly putting INFUSE that lenses mostly Dailies, wear ability great still some it's join of to the important comfort. where of problems that day, but an help things a through think I think product has

recession forward at for this time. see why the that's just the to But So comments we're in on in about discounts competitive Look with us. Have pricing, excited want the everyone. do comment everyone, want that. Operator, general having on to doing a we'll Thank we to a conversations that our much, some going the competitors, joining very don't day. INFUSE. that you we're what additional make you with to and future. great we stay we for But major day, concludes compared

Operator

presentation. The attending has Thank conference you you. now today's for concluded. Thank

now disconnect. may You

Bausch + Lomb (BLCO) 7 Aug 222022 Q2 Earnings call transcript