• Revenue (Excluding Bausch & Lomb): Increased 4% on a reported basis and 7% on an organic basis in Q4 2024 compared to Q4 2023.
• Full Year Revenue (Excluding Bausch & Lomb): Increased 5% on a reported basis and 6% on an organic basis.
• Adjusted EBITDA (Excluding Bausch & Lomb): Increased by approximately 7% in Q4 2024 compared to the prior period.
• Full Year Adjusted EBITDA (Excluding Bausch & Lomb): $2,553 million, an increase of 8% year over year.
• Adjusted Operating Cash Flow (Excluding Bausch & Lomb): Approximately $1.3 billion for the full year 2024.
• Consolidated Revenue: $2,559 million in Q4 2024, up 6% on a reported basis and 9% on an organic basis.
• Full Year Consolidated Revenue: $9,625 million, an increase of 10% on a reported basis and 8% on an organic basis.
• Adjusted Gross Margin: 72.4% in Q4 2024, an increase of 80 basis points year over year.
• Adjusted Operating Expenses: $958 million in Q4 2024, an increase of $67 million year over year.
• Adjusted R&D Expense: $163 million in Q4 2024, a $12 million increase year over year.
• Adjusted EBITDA (Consolidated): $935 million in Q4 2024 and $3,307 million for the full year.
• Adjusted Operating Cash Flow (Consolidated): $601 million in Q4 2024 and $1,572 million for the full year.
• Salix Segment Revenue: $634 million in Q4 2024, a 9% increase year over year.
• International Segment Revenue: $279 million in Q4 2024, a decrease of 4% on a reported basis, but a 1% increase on an organic basis.
• Salta Segment Revenue: $138 million in Q4 2024, an increase of 34% on a reported basis.
• Diversified Segment Revenue: $228 million in Q4 2024, a decrease of 12% on a reported basis.
• Bausch & Lomb Revenue: $1,280 million in Q4 2024, up 9% on a reported basis.
• Debt Reduction: Reduced net debt by approximately $520 million in Q4 2024 and almost $1 billion for the full year.

• Warning! GuruFocus has detected 3 Warning Signs with BHC.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bausch Health Companies Inc (NYSE:BHC) reported its 7th consecutive quarter of revenue and adjusted EBITDA growth, showcasing strong operational execution.
• The company achieved a 4% increase in revenues on a reported basis and 7% on an organic basis for the fourth quarter of 2024, excluding Bausch & Lomb.
• BHC generated approximately $1.3 billion in adjusted operating cash flow for the full year, exceeding guidance.
• The company made significant progress in its strategic priorities, including innovation and efficiency, with the approval of Thermage FLX in China and the use of AI in sales processes.
• BHC reduced its net debt by almost a billion dollars in 2024, strengthening its financial position and capital structure.

Negative Points

• The international segment saw a 4% decrease in reported revenues for the fourth quarter, impacted by currency fluctuations, particularly the strengthening of the dollar against the Mexican peso.
• The diversified segment experienced a 12% decrease in revenues due to the absence of a prior year's generic supply shortage that boosted sales.
• Bausch Health Companies Inc (NYSE:BHC) faces potential challenges with the FDA lawsuit regarding Norwich's ANDA and the potential impact on Zifaxan's market exclusivity.
• The company anticipates a reduction in adjusted cash flow from operations in 2025 due to the absence of one-time benefits experienced in 2024.
• BHC's exploration of selling Bausch & Lomb did not result in an offer reflecting its long-term value, indicating potential difficulties in monetizing this asset.

Q & A Highlights

Q: Could you provide the latest status update on the Norwich situation and your timelines around the FDA lawsuit? A: Thomas Appio, CEO: Norwich gained tentative approval, but the FDA denied granting them final approval, concluding that Teva has not forfeited their first filer status. Norwich has sued the FDA, and both Teva and Bausch Health have intervened. We believe the FDA is correct in its determination that Teva remains the first filer and has not forfeited. We are not speculating on launching at risk at this time.

Q: Can you provide more color on the two recent deals in the international side on the cardio metabolic front? A: Thomas Appio, CEO: We have focused on building our branded generic portfolios globally. The two deals in Latin America involve a broad portfolio of branded generic products with MSN and a single triple combination therapy for hypertension. These deals will power our growth in Latin America and include other international locations.

Q: What is the impact of the potential Medicare renegotiation on Zyfaxan and any preparations for a potential price reduction? A: Thomas Appio, CEO: Zyfaxan is on the Medicare renegotiation list for 2027. We are preparing for negotiations with CMS, focusing on demonstrating Zyfaxan's value, particularly in reducing hospitalization costs. It's too early to offer detailed commentary, but we are closely monitoring the situation.

Q: Regarding your plan to access capital markets by pledging a portion of Bausch and Lomb shares, can you provide any level of quantification? A: Jean Jacques Charhon, CFO: We are exploring various options to deal with our $7 billion of maturities by the end of 2027. The objective is to manage as much maturity as possible, considering our cash flow generation and cash on hand.

Q: What might you do differently going forward regarding the Bausch and Lomb sales process? A: Jean Jacques Charhon, CFO: Maximizing the value of our Bausch and Lomb equity stake is a primary value creation lever. We aim to complete the separation between Bausch and Lomb and Bausch Health in a way that is accretive to shareholder value. The timing will depend on what makes sense for shareholders and the transactions being considered.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.