text stringlengths 1 711 |
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KVUE segment-level adjusted OI). Categories represented in SHB primarily include |
face and body care, hair care, and sun care, and key brands include Neutrogena, Aveeno, |
OGX, Dr.Ci:Labo, Le Petit Marseillais, Lubriderm, Rogaine, Dabao, and Clean & Clear. |
Figure 17: Skin Health & Beauty 29% of Revenues and 18% of Segment |
OI |
29% 18% |
0% |
10% |
20% |
30% |
40% |
50% |
60% |
70% |
80% |
90% |
100% |
% of FY22 Sales % of FY22 Segment OI |
Source: Company reports. |
Figure 18: Skin Health & Beauty Category Revenue Mix |
% of FY Sales |
74.6% 68.7% |
25.4% 31.3% |
0% |
10% |
20% |
30% |
40% |
50% |
60% |
70% |
80% |
90% |
100% |
2019 2022 |
FACE AND BODY CARE HAIR, SUN AND OTHER |
Source: Company reports. |
Flat OSG Performance in Last 3 Years Ending 2023, Due to Supply Chain |
Constraints... |
Despite the category growing at a +4.5% CAGR from 2019-2022, KVUEs SHB |
segment has underperformed (3Y CAGR through 2022 just +0.1%) as the business |
suffered through supply chain challenges that seemed to have a greater impact relative |
to competitors, partially attributable to KVUEs exposure to sun care, which went |
through challenges last year given silicone shortages, in addition to impacts from lost |
usage occasions during the COVID pandemic (also impacted competitors). With that, |
over the past three years SHB essentially contributed nothing to KVUEs organic |
growth, and as of 2022, SHB volumes still stood around 3% below 2019 levels. |
… Turning the Corner Accelerating to MSDs OSG in 2H22 and Low Teens in 1Q23 |
That said, KVUE appears to be turning a corner more recently in top-line trajectory |
(albeit against a low bar) as the company undertook actions to streamline its supply |
chain and build resilience (in addition to general easing of supply chain situation |
globally). Specifically, 2H22 organic growth in the segment came in at +5.3% (+MSD% |
in each of 3Q/4Q) vs. a -4.0% organic growth decline in 1H22, implying a 3Y CAGR in |
2H22 of +1.5% vs. -0.8% in 1H22. Momentum has continued thus far in 1Q23 with |
organic growth of +13.2%, and the segment seems to be on stronger footing now to take |
advantage of favorable secular trends in the categories of body, face, and sun care. |
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP. |
15 |
Andrea Teixeira, CFA AC |
(1-212) 622-6735 |
andrea.f.teixeira@jpmorgan.com |
North America Equity Research |
29 May 2023 J P M O R G A N |
Figure 19: Skin Health & Beauty Organic Growth Trends and Outlook |
-3.3% |
2.3% |
-2.3% -2.1% |
2.5% |
3.5% |
0.8% |
0.6% |
2.8% |
7.9% 2.6% |
1.8% |
-4% |
-2% |
0% |
2% |
4% |
6% |
8% |
10% |
2020 2021 2022 2023E 2024E 2025E |
Volume Price/Mix |
Source: Company reports and J.P. Morgan estimates. |
Figure 20: Skin Health & Beauty 2022/2023E Organic Growth by Halves |
-5.6% |
1.1% 1.0% |
-5.1% |
1.6% |
4.1% |
8.4% |
7.4% |
-8% |
-6% |
-4% |
-2% |
0% |
2% |
4% |
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