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

Robert Coury : Hi, Ash. I think, look, Ash, I think we’re — the promises made and the promises kept is total shareholder return, okay? That was always predicated upon both the dividend and a share buyback. We said we were going to have a dividend when we first started out. We thought that was important that we follow through and execute and establish a baseline for the dividend. But when your security is trading at the levels of where our security is trading, I mean, it doesn’t take a rocket scientist to know that the best investment that we have for any excess capital is to buy our own company back. And that’s what you should be expecting from us. And until we see levels within the security that better represent what the valuation in terms of what we believe that we created, we’re going to continue to buy our shares back.

So I would strongly ask the investment community to stick with what we said from day one, total shareholder return is a combination of both dividend and share buyback. And as Sanjeev pointed out, I believe, just at this point alone, we’ve already returned a 33% of the free cash flow and an increase of how much percentage?

Sanjeev Narula : 40% — at minimum 40%.

Robert Coury : And a return of 40% greater than we did all of 2022. And you guys should expect that going forward. And remember, as we go into 2024, I believe the company will be well positioned to convert from a valuation from this EBITDA, especially as we pay down our debt and get it to the three times to really convert it over to an adjusted earnings per share strategy. I see tremendous growth as an adjusted earnings per share, because of our capital allocation commitment to the investment community of return at least 50% through the dividend and more importantly, the share buyback.

Operator: Thank you. Our next question will come from Gary Nachman with BMO.

Gary Nachman : Thanks. Good morning. First one for Scott. Do you think you might want to do anything differently in terms of positioning the company to be more successful on the branded side of the house, given your experience there? And I’m curious how you think about some of the planned initiatives to expand into areas like ophthalmology, GI and derm, that’s been talked about in the past? So what do you hope to leverage on the branded side in terms of your experience? And then for the team, just in North America, with the guidance down 3% this year, just at what point do you think the new product revenue will be able to offset that base erosion and return to growth in North America? Is that something that can happen next year based on the trajectory that you’re seeing? And maybe talk about if you’re still comfortable maintaining that same level of base erosion now going forward? Thank you.

Robert Coury: Why don’t you take this backwards? Why don’t you go first and then let’s Scott close.

Rajiv Malik: Yeah. First of all, overall, from a stability point of view, I very clear when speaking, this is sustainable stability, and we see, in fact, accelerating the top line growth. We are not giving guidance, but we are projecting that this stability enhanced ability will lead to that. Coming directly to North America, there are no major — no LOEs for North America. And why I say, for us, the market and performance were the LOEs for the North American business. We don’t see any major alloys. And from 2024 onwards, your expectation is right. You should be seeing North America coming back to the growth and all the basic erosion being offset by the new launches of North America.