Perrigo Company plc (NYSE:PRGO) Q4 2023 Earnings Call Transcript

Eduardo Bezerra: Yes. So we expect that to have an impact in 2024 and that should be it, right? Because remember, last year we talked about 1,000 SKUs that we were rationalizing and so we expect another 1,000 this year and we should be done by that. The majority of the other benefits coming from the supply chain reinvention are mainly on the planning process and how we work in our facilities through our Perrigo work systems, but that should be it.

Bradley Joseph: Yes. And Karen, this is Brad. So for the impact on the top line to take what Eduardo has said, it’s about a 1 point impact to organic growth to 2024.

Korinne Wolfmeyer: Very helpful. Thank you.

Patrick Lockwood-Taylor: Great. Thank you.

Operator: Your next question comes from the line of Daniel Biolsi from Hedgeye. Your line is now open.

Daniel Biolsi: Thank you. So are the headwinds to the CSCA oral care still the SKU rationalization efforts and then the promotions?

Patrick Lockwood-Taylor: Yes. That’s mainly it. But important to say, we’re seeing the business on a positive trajectory, right. So remember, we had significant impact in 2022, mainly because of the disruptions after COVID and additional logistic costs. All those things have been significantly addressed during 2023. And also importantly from a cash standpoint, the team did an amazing job and had contributing almost $50 million on reduction in inventories at the end of 2023. So I would say the health of the business has improved significantly. We need to continue to work there to make sure that our portfolio is in line with our customers’ wants and we even on that side on the branded, we had exited some brands that didn’t make sense for the long term.

Daniel Biolsi: Thanks. And if I can squeeze one more in. On CSCI, the cost of goods inflation, are there pricing actions being taken? Or are we sort of nearing the end of this inflationary impact?

Patrick Lockwood-Taylor: So that’s a great question and that’s a great point. So we’re seeing very positive pricing actions taken. I think it’s because the inflation is still — while in CSCA, we saw significant deceleration during 2023. In the beginning of the year in CSCI, that’s still taking longer. And so we’re taking a benefit of that and we’re seeing very great momentum that continues from Q4 into Q1 in our international business, mainly fueled by pricing increase.

Daniel Biolsi: Thank you.

Operator: There are no further questions at this time. I will now hand the call back to Brad Joseph. Please continue.

Bradley Joseph: Thanks, Sean. Thanks everybody for your interest in Perrigo. Looking forward to catching up soon.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.