Bausch + Lomb Corp. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Product Launches & Innovation: Continued introducing new products across businesses/geographies. Pipeline includes biomimetic contact lens, myopia control solution, AREDS3, LUMIFY Lux, Elios procedure, premium IOLs, and novel pharma treatments.
• Growth Trajectory: Booked fifth straight quarter of double-digit constant currency revenue growth, 17% full year constant currency growth. Organic revenue CAGR over past two years ~10%. Dry eye portfolio nearing $1 billion in annual revenue.
• Segment Details: All three segments had double-digit growth. Miebo exceeded guidance, Xiidra hit high end of projections; dry eye portfolio broad-based with OTC solutions.

Segment Performance

• Vision Care: Fourth quarter revenue was $723 million, up 11%. Full year revenue was $2.739 billion, up 10%. Consumer business saw LUMIFY grow 24% in Q4, dry eye portfolio at $103 million (20% Q4 growth), Artelac up 18%, Blink up 12%. Contact lens revenue grew 13% in Q4 and 11% full year, with Daily SiHy up 75% in Q4.
• Surgical: Fourth quarter revenue was $231 million, up 15%. Full year revenue was $843 million, up 11%. Consumables grew 10% in Q4, equipment up 21%, implantables up 19% (premium IOLs up 67%).
• Pharma: Fourth quarter revenue was $326 million, up 7%. Full year revenue was $1.209 billion, up 45%. Miebo delivered $172 million full year, exceeding guidance; Xiidra had $364 million full year, hitting high end of guidance.

Guidance

• Full year 2025 revenue expected $4.95 billion to $5.05 billion (5.5%-7.5% constant currency growth). Adjusted EBITDA guidance $900 million to $950 million. Currency headwinds estimated at ~$100 million to revenue and $20 million to adjusted EBITDA in 2025. R&D investment expected at ~7.5% of revenue. Expect EBITDA margin expansion.

Risks

• Currency fluctuations could impact revenue and adjusted EBITDA.
• Dependence on successful product launches and clinical trial outcomes for new products like the biomimetic contact lens and Elios procedure.

Question and Answer

Q: Patrick Wood from Morgan Stanley asked about customer side execution and growth.

A: Brent Saunders discussed operational excellence, selling excellence, and innovation driving growth over the past two years, highlighting broad-based growth across segments and geographies.

Q: Joanne Wuensch from Citibank asked about contact lenses and biomimetic lens.

A: Brent Saunders and Yehia Hashad talked about contact lens growth, including Daily SiHy and ULTRA, and the biomimetic lens development, emphasizing use of existing equipment to minimize capital expenditure.

Q: Craig Bijou from Bank of America asked about dry eye franchise performance (Miebo and Xiidra).

A: Brent Saunders and Sam Eldessouky discussed Miebo's strong launch and growth potential, Xiidra's momentum and IRA impact, with focus on TRx growth and market access.

Q: Doug Miehm from RBC Capital asked about Miebo's managed care and profitability.

A: Brent Saunders noted Miebo had 74% commercial coverage and 64% Medicare, nearing full coverage, with potential for profitability starting in 2026.

Q: Robbie Marcus from JPMorgan asked about cash flow and EPS.

A: Sam Eldessouky discussed expected positive free cash flow in 2025 due to cash generation momentum and CapEx guidance, and EPS growth tied to tax rate and currency factors.

Q: Gary Nachman from Raymond James asked about dry eye patient compliance and Miebo sampling.

A: Brent Saunders mentioned Miebo had higher refill rates due to strong clinical and safety profile, and investment in Miebo's long-term outlook.