Viatris Inc. (NASDAQ:VTRS) Q4 2022 Earnings Call Transcript

Sanjeev Narula: Yes, yes. So sure. Chris, so nothing has changed from November 7. Chris, when we talked about that, including the fact that we provided an outlook of $2.3 billion on free cash flow for 2024. Chris, you’ve seen, we’ve demonstrated last two years a very strong cash flow generation in the company. The entire focus on that, and that’s allowed us to meet our Phase 1 commitment thus far. And that momentum will continue from that. So what’s included in $2.3 billion are essentially a couple of things. First is, we’ve considered all the divested business out of that number from $2.3 billion. What it does not include any divestment, cost and any taxes on the divestment proceeds, which will actually be funded out of for the proceeds.

So that’s the number. That takes into account all the divestment, and we feel very confident about where we are. The guidance that we’ve given today, Chris has a line of sight to all the moving pieces, and we remain very confident about $2.3 billion outlook in 2024.

Robert Coury: Yes. And I guess the only thing I would add, Chris, we said they were at least $2.3 billion for 2024, taken into consideration everything that Sanjeev said. And so I believe even the onetime cost, I think we are extremely confident that we’re going to be able to, hopefully — again, we’re not giving guidance. I don’t want people to think we’re giving guidance, but we thought that, that metric was very critical. So look, hopefully, we’ll even be able to absorb even the one-time costs. I think the new piece of information that we telegraph today, even though we’re not giving guidance for 2024 and the fact that we’re showing growth now in 2023 top line over 2022, when you take out the biosimilars business, is the accelerated growth we see in top line from 2023 to 2024 now.

And I do think in the last call, we were asked in terms of, again, I think maybe with Umer’s question, is it fair to say if we look at the EBITDA conversion for cash flow how you back into EBITDA, I think the range of the four, six to five was what my answer was on November 7, and that hasn’t changed at all.

Operator: Thank you. Our next question will come from Glenn Santangelo with Jefferies.

Glenn Santangelo: Hi, guys. Good morning. Thanks for taking my question. Hey, Robert, I just wanted to follow up on these non-core divestitures. I mean you all said a number of times that everything sort of remains on track. I was just wondering if you could sort of comment on the tone of those negotiations? And are you still comfortable with the level of proceeds from these transactions that you discussed historically, because you threw out some pretty high valuation multiples on those sales? And then, I guess, just a follow-up to that would be assuming you are, I mean, that’s a lot of cash coming in the door. I was wondering if you could just sort of revisit some of your capital allocation priorities. I mean you gave in the slide deck, your capital allocation framework for the free cash flow, but that’s a lot more money, and I’m trying to think about how you may want to deploy that vis-à-vis business development versus pay down versus repo?