Perrigo Company plc (PRGO) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us for this year's Goldman Sachs Global Staples Forum. However, this year, we're doing it virtual rather than live on stage in New York. But nonetheless, I think the event is going to go off without a hitch. Kicking us off this morning is Perrigo. I'm excited to hear the presentation, to hear how their story is evolving. But before we get into all the fun and excitement, I've got a few disclosures I need to get out of the way. First and foremost, this conversation is not intended for the media. It was off the record. This call webcast is not for the purpose of sharing or receiving nonpublic or otherwise confidential information. Attendees are public side market participants, who may not receive and should not request nonpublic or otherwise confidential information about issuers or securities or about the markets for securities. And bear with me, I'm not quite done just yet. We're required to make certain disclosures in public appearances about Goldman Sachs' relationship with companies that we discuss. The disclosures relate to investment banking relationships, compensation received to 1% or more ownership. We're prepared to read a live disclosures for any issuer upon request. However, these disclosures are available in our most recent reports available to you as clients on our firm portals. Okay. With that out of the way, and it's also detailed on Slide 2, if you want to go back and catch up the language, I'm happy to now pivot. We're going to pivot to webcast format. For all of you who are tuned into the webcast, you would and should see on the bottom a Q&A submission option. So as we go through, if questions pop in your mind, feel free to post them there. I'll be able to read them, and I'm going to be happy -- more than happy to post them, assuming they're appropriate up to management as the webcast evolves. Okay. So kicking this off this year, as I mentioned, is Perrigo. Perrigo's an interesting company. It's embarked on a transformation from a health care business to what it calls a consumer self-care company, as a pure-play, over-the-counter consumer packaged goods business. Joining me on this virtual stage to tell the story is Murray Kessler, Perrigo's President and CEO. Many of you may know Murray from his time leading the Lorillard Tobacco Company before this or UST and Altria before that. Joining Mr. Kessler is Mr. Raymond Silcock, Perrigo's CFO. Mr. Silcock has a long track record of public and private company CF roles, including CTI Foods, Diamond Foods and UST. So with that, let me turn the stage over to Murray to give us a little bit of an overview before we jump into Q&A. Murray, the stage is yours.

Thank you, Jason. I'm going to move to our forward-looking statements and not going to go through them in as much detail as you. I'd just encourage everybody to read and understand our forward-looking statement. So we'll start on the slide that says Perrigo is a $5.1 billion global Self-Care leader. And for those of you who don't know us, we are focused on transforming to [ integrate ] Consumer Self-Care strategy. 80% of our net sales, in fact, are consumer packaged goods business. We are the leading Self-Care provider over-the-counter in the U.S. as well -- in store brands as well as infant formula and oral care. And internationally, we are branded products. Primarily, we have a store brand business there, and we tend to have a string of pearls, regional jewels throughout Western Europe is primarily our -- where we do 95% of our international business. And then again, those are focused consumer brands, tend to be #1, #2 in each of their individual markets. And then we have a 20% of our net sales is an Rx generic pharmaceutical business, which we are the leader in generic extended topical products, which eventually we'll be divesting, but as I said in the past, now is not the right time. Going to the next slide, we adopted a new vision and consumer focus a year ago. And for anybody who knows me, I'm all about leading with vision in every company I've run. We have a vision that every single person in the company can see theirselves somewhere in it to make sure we're all heading in the same direction. And the vision we put in place a year ago is to make lives better by bringing quality, affordable self-care products that consumers trust everywhere they are sold. A year ago, that said health care, and it didn't have the rest of it, just quality affordable health care, which was all about treating sickness. The difference between health care and self-care is we want the entire spectrum of not just treating sickness, but preventing it and improving wellness. So -- and the design of that opened up a myriad of categories and growth opportunities for the company as opposed to being strictly treating disease. The next slide talks about the progress we made, and we slated this as a 3-year transformation journey. We'll have to see how COVID-19, if it slows us down a little bit, but so far so good. But we had a number of steps of reconfiguring the portfolio. We've done a number of acquisitions and divestitures already, achieving our base plans and -- which meant getting -- building market share and improving customer service levels, et cetera, and ramping up our internal new product innovation portfolio, which we put $500 million of new products in our pipeline, strengthening our organization. We've changed 40% of the leadership team externally as well as promotions internally, and building out some of our technology. We need to pay for it all. So we've launched a program called Project Momentum, which identified $100 million cost savings initiative, all on track as a company. And we have -- we turned a lot of cash. We tend to convert more than 100% of our profits into cash and we're sitting with about $500 million on our balance sheet right now. And we have committed about $150 million to capacity investments. All of that now with us in the last 6 quarters, since my team and the existing team got together, we've had 6 consecutive quarters of meeting or beating expectations, which was a change prior -- than the prior 4 or 5 years. And we've also changed up a lot of our ownership base. 30% of Perrigo is now owned by consumer investors as we've restored revenue growth. Going on to the next slide. Year 1 of the transformation was indeed all about returning the company to revenue growth. And I think the graph speaks for itself. We began the process of launching in Q1 '19. We announced it at our investor conference in May of 2019. That's the difference between the orange line and the blue line. Blue line is organic growth. So we did a good-size acquisition of Ranir, $750 million, the leading private label oral health care -- oral care brand in the world from a private-label standpoint. And -- so that gave us some beautiful nonorganic revenue growth. But you can see what's happened to the organic growth line too. So we'll talk in a second about the impact of COVID. But this is not -- the revenue growth of Perrigo is not something that just started in the last 6 weeks. It started over a year ago. Going to the next slide. Having said that, the first quarter of 2020 was remarkably strong, and we all know why. Perrigo consolidated net sales grew 18% with our Worldwide Consumer business up 21% versus a year ago. Going to the next slide. But as I said, organic growth was strong before the COVID-19 demand and then off the charts starting March. So all I did here is just break out so you can see how we were trending in January, February. And you can see our revenues were up 8% for, cumulatively, January and February. And that's against what we have established as a 3% organic revenue target. So just to be clear, that doesn't include any of the bolt-on acquisitions, that's pure organic growth in our core business in the U.S.A., which everybody who follows us and knows us is our profitability engine, was up 8%. And then in March, with COVID, it was up 28%. The amazing thing, and you're seeing the economy starting to start again and manufacturing come up. We've been able to keep 38 facilities running all shifts all through the crisis as these were essential products that society needed, and it's due to the amazing efforts and heroic efforts of our employees when they were doing it during the worst and scariest times. Not that we're through this yet, there's a lot more to go. But I'm proud of what they were able to accomplish. And from us, you need to know that we focus through this crisis on employee safety, business continuity, appreciating our frontline bonuses, doubling their bonuses in the first quarter, making sure all kinds of safety precautions were in place and also supporting the communities where we work. We provided and prioritized the products that society needed most. So you may -- if you were out looking for a Tylenol or we make the Tylenol equivalent with acetaminophen, we're over half the U.S. supply of acetaminophen and make tons of other essential products that you needed in your household and you have it, thanks to our amazing employees. The other thing that was remarkable during the course of it, it was kind of 3 phases that we saw. There was an initial sort of pantry load of consumers, and I'm on the next slide now that says global investment over the past 2 years in e-commerce are paying off. There was the first phase of it, where people went in, mass merched all that, loaded their houses. Then we saw a big period of time when they sort of consolidated. There was some channel shifting within brick-and-mortar to what we saw to sort of one-stop shopping. And then as the third phase of it, a real dramatic ramp-up in e-commerce. And when I talk e-commerce, I'm not just talking Amazon. I'm talking businesses that -- like Walmart and Target that were building their e-commerce, all of a sudden went off the charts. And that's continued to go that direction. So in Q1, we saw a significant bump. We were up 72% in our e-commerce business worldwide. And as I said on our earnings call, that's continued on. So that was year 1. Year 1 was revenue. We got revenues going. Now we're in year 2 and year 3 because we don't just want to deliver that 3% revenue target. We want 3, 5, 7 as our mantra; 3% revenue, 5% OI growth and 7% EPS growth. In order to do that, we are focused on these 4 priorities: stabilizing and growing margins. And the big issue there is we've had to make some significant investments from my perspective to make this company able to sustain its performance over the long term, which included things like finishing that technology upgrades or centralizing finance upgrading rollout, giving ourselves a higher level of business intelligence and data analytic capabilities that should have been done years ago, expanding capacity and strengthening our supply chain. Again, we run 24 hours a day, 7 days a week and don't have huge surge capacity, and that's been tested here reasonably, meaning we weren't able to supply nearly all of the orders that we've been getting over the past couple of months. And then, finally, if you follow the Perrigo story, we need to reduce uncertainty around the Irish tax -- or the Irish tax, which is starting with a judicial review that got delayed. So let me go now to the summary, which is when you look at everything that's going on in the world, we think Perrigo is very well positioned. I didn't know this was going to come about 1.5 years ago when we laid down the vision. But clearly, in a new normal world, a company that is focused on self-care, less reliance on hospitals and doctors and staying well, it's going to be more critical than ever before, a company that sells value products as the primary source of its revenues and profit is clearly -- and historically performs well during recessionary period, and a company that has invested dramatically in e-commerce over the past 2 years in a world that has shifting channels towards e-commerce, Perrigo's got all 3. And we think that makes us darn attractive. We'll continue to make investments in bolt-on acquisitions and e-commerce and innovation as they're paying off. And you've heard the rest of it. And we generate a lot of cash. We're shareholder-friendly, and we're working as hard as we can to deal with the tax uncertainty. And with that, Jason, I tried to be quick, let's go to Q&A. Back to you.

Awesome. Cool. That was a good summary. As a reminder to everyone in the audience, feel free to submit some questions through the webcast, and I'm happy to assume they're appropriate, vocalize them to management. We have a couple in there now. But before I jump into those, I just want to take a quick step back on some of the stuff you just presented, Murray. I hear you loud and clear on the shift towards Self-Care and why it's resonant. Can you drill a little bit more in terms of portfolio strategy? I think you've highlighted 5 key global growth platforms. Can you quickly bullet point what they are and why they are the 5 in focus?

Yes. The process we went through was to identify the areas within our portfolio [ in the ] areas of growth that would -- that you could actually quantitatively say would make -- gave a significant opportunity. You've got to remember that when I joined the company, we were flat or slightly declining or up just about 1%, and nobody believed Perrigo would -- could grow again. So then we got the core business growing, and we focused on the areas, but the areas are the ones you would expect, our core OTC business, our nutrition business, our oral care business, science-based naturals are the other business. And just remembering the fifth one, as we're just starting on here now. Give me a second, and I'll get that back to you. But each one of those were -- and nicotine replacement is the fifth one. Each one of those, as an example, if you look at nicotine replacement, when I was on the cigarette side, I used to laugh at the nicotine replacement business because it was so tiny and wasn't growing. We've gotten it growing again. But when you look at the nicotine replacements business in the world, it's like a half a share point yet in a multitrillion-dollar category that is the smallest increments could double or triple that business. And the problem, as an example, if you're not delivering the product in forms, smokers who want to stop smoking, which almost all of them want to do it and attempt to do, we don't have those solutions. So that's a good example. And we didn't have oral care as when we went to Self-Care, that allowed us to expand into that category and we bought that company. Science-based naturals, most of our branded portfolio or a good portion of our branded portfolio in Europe is those products. So instead of Lipitor, we have a natural based way of reducing cholesterol with a product called Arterin. And then as -- and bringing some of those products to the U.S. and synergizing these companies more, we have weight loss products, an entire line of science-based natural products with clinical studies, another growth opportunity. So I mean you can just go through each one of them. Oral Care, we're only a 14% penetration of store brand versus national brand, but our average in OTC is 30%. So each one of those we've diagnosed, which is the strategy, what is the opportunity? And it's literally billions of dollars of opportunities, and we've gone after the faster ones, but I'll tell you what, it's -- there is no lack of opportunity for growth within this company.

And I think one of the terms you've begun to throw out in effort to get that growth in terms of how you manage that portfolio has been consumer 2.0. Can you elaborate on what that means and how it's coming to fruition in terms of how your tactics are changing to go after that growth?

Yes. The consumer 2.0 really is the intersection between national brands and store brands. And I believe -- but most of the major consumer packaged goods companies are also going to approach this, right? So people ask me, Murray, are you going to go head-to-head with the Procter & Gambles in the world and all that with national brands? And the answer is, no, because they're -- that they're better at what they do, and we can't beat them at that game and they can't beat us at our game. But what this consumer 2.0 space is a realization that our customers and store brands have gotten so big and they've gotten good at marketing their brands that they're now evolving themselves, right? So it was sort of white label in the beginning, and then it was considered private label. And then the customers started calling it store brand and now they call it own brand. But when you look at a brand like Equate, it's the largest OTC brand by like threefold or fourfold versus any national brand. They're so big. They're now looking -- these major customers are now looking at branded products that they could have exclusively, and exclusively is the keyword, at their store only to be bought at Target. Target is probably a leader in this area, only to be bought at Walmart, only to be bought at other major customers. So now the debate comes, who is best suited to go after that volume? Is it the national brand? Or is it a brand like -- is it a company like Perrigo who customizes all the time. So again, we have to raise our skill in branded products and that's why I just put Rich Sorota in after Jeff retired as Head of our Consumer Americas business, a guy with a branded career and store brand, and then have all the capabilities with it. But that's versus those big national brand companies having to be able to customize at the level that we do, which they're just not built for. So we will and are developing custom brands, and we will do that with a -- an obsession for meeting our customer needs and just as Perrigo can do.

Well, let's talk on that point for a minute, the custom brands because I think there's a -- we could probably carry an entire hour just on that topic alone. But many of us in CPG world are familiar with companies who participate on private brands. Some of them have done so with good success, others have not. Where we've seen companies get into trouble, it's been where there's been a plethora of other suppliers in the market. And so an abundance of other manufacturers or retailers to turn against and where those manufacturers that are focused on trying to drive margins. Often, that's been where they've gotten tripped up. There are some exceptions like I'll highlight Edgewell, which has sort of an IP stack, which gives them a bit more of a moat, or McCormick with a complexity and scale supply chain that gives them a bit more moat. Is there a moat in your industry? Or is there a pathway that allows you to have healthy or maybe even growing margins on that business while still participating on the revenue growth side of it?

On the Consumer 2.0 or in private label and store brand in general? I mean, there's huge moats around our business…

The latter, the latter, private label, store brand in general.

Yes. I mean we are -- listen, we're probably 16%, 17% operating income margin business when we're operating correctly and I'm not investing like crazy, but there's huge moats around the business in terms of supply side, the types of products we make, the breadth of products. We make 14,000 products. We have a huge advantage that I think is becoming a new moat that in the U.S., we have 24 manufacturing facilities in the U.S., when Congress is screaming for products to be made in the U.S. The only area we get on pressure on margins is price competition. When foreign Indian companies, et cetera, try to come in and cherry-pick a particular item or 2 and compete purely on price. I hope this period of time has let us show what the Perrigo advantage is because we've been able to keep running. We've been able to -- we've got the API supply. We have the wherewithal and the manufacturing scale like no other to keep our products going and the regulatory capacity. But yes, we have regulatory capacity. We have our ability to file first. We have manufacturing scale. We sell more ibuprofen than ibuprofen. We sell more Tylenol type acetaminophen than Tylenol. So the big issue is with our customers. And we need -- and why I'm so passionate right now about getting our service levels at a higher level than they've been over the last year, couple of years, actually, and differentiating. So we want to combat price with national brand better, we call it. We used to be a national brand equivalent company. Now we want to be national brand better, part of the consumer-focused, differentiated, a provider of consumer 2.0, customer obsession, perfect customer service. When all those things happen, the moats are giant. But yes, we're a strong margin business. We expect those margins to grow. We have good cost savings initiatives, but it's right now, keep the revenues going, keep the margins going, get the cost out with Project Momentum. And I think that we're certainly in the right place at the right time with our business model.

Okay. I want to go to the audience for one question and kind of merge it with something else you said earlier. So the question coming from the audience harkens back to what you initially had said about margin expectations for 2020, which earlier last year, I think you were expecting continued growth. But in 4Q, you ratched that back, and you touched on it in the slides earlier in terms of the investment that you're making to ensure that the transformation has -- is durability of success. Is that the primary reason for the slightly more protracted trend bend in margins? Is it the investment? And if so, where do you see yourself on the investment spectrum? Do you think that after the investment this year, you're going to be at sort of a steady -- a solid, steady-state run rate? Or would you expect you're going to have to layer on investment upon investment as we go throughout 2021 as well?

Well, 2 parts of the question. I don't agree that we're far behind where we expected to be in margin. So -- I mean you've got a lot of mixed things at play. We put pressure on to grow and focus, pressure is probably not the right word, we're focused to grow our U.S. store brand business. That's at a lower gross margin than international. Our store brand business in the U.K. is growing like a weed. It's growing very rapidly. It's a lower margin business. And we bought a huge business for us in Ranir that is a store brand business. So you added all of that in at lower gross margins. So each one of those sort of have a lower gross margin. But AHA, they all have the same or equal operating margin. So we have stabilized operating margins after I made that initial round of investment. So it's kind of right on track. There were some investments. There was a little more technology investments and capacity investments that was my -- probably my biggest surprise joining the company to get it where it needs to do to grow and sustain, but they're not crazy. It was about $50 million, about $30 million last year and about $50 million in total this year. I expect, though, as we go forward, that once we get in SAP, we're not repeating that investment. Centralizing finance that we call our [ CFN ] project, we're not repeating that investment. Our business intelligence and the investment to get that in, we're not repeating the investment. So the only level of investments that should sustain are the ones on long-term innovation. Now the good news is, as we get into next year, we start launching some of those bigger products so the revenues go with it. So it shouldn't ever have to go incremental to this year. I mean I shouldn't ever say never. But in general, the amount of money that we have there should be sufficient that going forward, you just get the leverage through the P&L. And that's what you -- that combined with our cost savings initiatives. But if you look at the first quarter, when you had a surge in volume, you really saw the leverage in the P&L and the increase in operating income margins. The bottom line is we will stabilize and grow margins, but we are most focused on, I'm not saying we're not focused on gross margin, we are, especially once we lap [ or near ]. But at the end of the day, it's operating income margins. It's 3% revenue, 5% operating income, 7% EPS against whatever is a normal year because this is kind of an interesting one in the middle here.

Yes. Let's jump to that what's so interesting, the sort of anomaly. But before I do, I just want to close the momentum you had before we hit into COVID-19 because 8% organic sales growth in Jan and February is exceptional. What were the drivers of that strength?

Well, and it wasn't -- so let's call it October to February because the 3 months, the fourth quarter, if you recall, we're similar levels. I think the organic growth might have even been 11% in the fourth quarter. So it was a sustained period. There were just a number of things that all came together, and I can just start flipping through them. Strategically, it was the investment in e-commerce. Our e-commerce business started accelerating and becoming a bigger piece of the business. Amazon became a bigger piece of the business. So that was one piece. Market share and new products, hand-in-hand. I don't like giving the new product number the way Perrigo used to because it's all about incrementality and new products. But we had segments and new products that came in, in areas that we were weak and we were able to gain significant market share during the fourth quarter, which has then become sustainable in the business and filling those white space opportunities. In Europe, we launched a myriad of new products and freshened up and synergized across the line. In nicotine, you had a surge. One, we had some national brand better products, better flavors. We won a big distribution. I mean a product that we had lost a year ago on a big customer that the business fell off once they switched away from us because we have a product that's preferred 2:1. They switched back. That got going. Then you had the entire issue that was around vaping and deaths and increasing quitting, which has actually accelerated through the COVID crisis. It's not a good time to be smoking. And all of that has benefited the nicotine business. In infant formula, we had launched a major product at a major new customer, which is helping to supplement that growth. And then on top of that, you had a strong cough/cold season. So it was a number of factors. The cough/cold season, we'll have to go up against these numbers and COVID numbers next year. But as a broad group, all of the increases in structure on e-commerce and market share and white space and then add the benefit of value products in a recession, I feel real good about it. And it's not just a couple of months. It's 6 months of strong organic growth. But I'm still promising the 3%, Jason.

3% over longer duration or 3% this year?

3%, we are trying to benchmark against our consumer packaged goods peers if we're going to justify a multiple like those companies, which means it has to be long term and sustainable. I guess if the whole CPG industry changed their numbers, we might modify. But we benchmarked 3, 5, 7 as sort of the higher performing CPG peers, and that's our long-term sustainable target. So we did better than that last year, but that has benefited from bolt-ons, and we'll continue to do bolt-on. But it's -- 3, 5, 7 is the goal each year.

Yes. Well, that is generally a good reflection of sort of the median of CPG targets. Unfortunately, the reality is less than half of them achieved it over the last decade. So for you to actually get there, even though it may be the median of where the targets are, just getting there puts you well above average. But coming back to the near term, I asked the question of 3% this year, kind of a bit to just back into where we are right now. I mean you've come out of the gate swinging on strong COVID-19 demand. I think last time you reported earnings, it was a bit unclear how much of this was pantry load and how much of this was elevated consumption. We're a few weeks further in, a few weeks of a bit more data, any other indications how are you seeing demand trend now that we lag a little bit further into this?

Yes. I mean I gave a little more transparency than I normally do on the earnings call on looking forward based on my interpretation of SEC guidance. But the first quarter, you certainly had that surge during March. I said on the call that -- and remember, I did the call in the last couple of days of April, so I had the benefit of knowing our numbers, April was a continuation of very strong sales. And now remember, I'm prioritizing products that society needs, not necessarily prioritizing -- well, I'm not prioritizing profitability. I wasn't going to ask my folks to come in what they perceived as risking their lives to come to work to make minoxidil. We were making acetaminophen and cough medicines and albuterol and Alprazolam and electrolytes and oral electrolyte solutions, et cetera, that people needed most. But in general, demand for us remains strong, especially e-commerce. We're still behind in manufacturing. The IRI numbers that you guys see and are published show that categories have come back to normal. But on a cumulative basis, they're still up there. There's a couple of SKUs that are still in high demand. Acetaminophen is still in extremely high demand. Ranitidine now, based on some stories on CNN, et cetera, but in general [Technical Difficulty]

Murray, can you hear me? I think your line started to fade a bit there.

Okay. Yes.

I'm checking with some other folks. It looks like it wasn't just mine, which is -- okay. You're back. You're back. I got you. Are you back?

All right. So can you hear me?

I can hear you now, yes.

Okay. Well, I'm not sure where I cut off or not. So does you ask next question or...

No. I think we got the message. The question is, what have you seen since then? And your answer was, hey, demand is still strong. And we're still having a hard time keeping up with that demand, in part because we prioritized real essential goods. Is that a fair summation if I distill it down into a couple of seconds?

Yes. And that's on our major products. And it's -- and I just said we do have some products that are softer, and so we'll play through all the mix. But in general, I think we're in much better shape than a good deal of companies in America right now, and we're ahead of our plan by a pretty good margin.

And despite being ahead of your plant, I think you chose not to raise guidance. I appreciate it's early in the year. But what are some of the risk factors you're watching that kind of keeps you from pushing guidance a little bit higher right now?

Well, I think the big unknown for everybody -- and we have gotten a lot more experience at this, Jason. But the big unknown for everybody is as the country reopens, our challenge multiplies. In the first 2 months, I had to keep people. I had a -- people went sheltered at home. If they were following the rules and our team, I believe, all follow the rules, then they would come to the plant, where we could do all the proper social distancing and temperature checks, they get in the plant restrictions and disinfecting and sanitizing and then they went home again. And then they came back to the plant. And even with that, we had a number of -- not huge numbers, we had a number of cases and because we were doing all the proper steps, we could isolate and keep everything running. Now you got a whole new complexity when the people aren't just going to the plant and sheltering a place, that they're starting to go to restaurants and to the beach and to retail stores. And if this thing spikes again, that's the part that makes me nervous. Now again, each day that goes by, I'm lesser at risk because our team is very experienced and our systems are very strong. But I need to keep -- our team needs to keep these major facilities running. And that's the part that keeps me up at night, an API supply and everything else. So knock on wood, everything has been good so far, but it's all about business [Technical Difficulty] right now.

Awesome. We are almost out of time. We're like literally into the last 60 seconds now. So I just want to close with 2 sort of rapid questions for you. Flash forward 12 months from now in the categories you compete in, are store brand share -- is store brand share a lot higher than it is today? And secondly, as we come out of COVID-19, nobody has a crystal ball, but would love your best guess at how you think consumer behavior has changed in the wake of all this?

Well, they always say and for consumers, it takes 30 days to form a habit. So I think big habits are being formed on e-commerce. I just -- and I think big habits are being formed with teledoctor, self-care. So value, we'll see through a recessionary period that has its cycle, that's not permanent. But I think the trend in acceleration, I think we advanced years on e-commerce, and I think we advanced years on our plans on self-care and wellness, which was already the #1 Google search term. So bottom line, those are the big ones and more online shopping, et cetera. That's just here to stay. I think people over the next year or so will get back to restaurants and things, but they'll be careful. Our business -- and we'll operate different as a business. There'll be more work from home. There'll be less flying. So our business model won't change a lot, but it will evolve. Fortunately, we didn't force a strategy change. And I think Perrigo is a good investment. And if you're listening, buy Perrigo stock.

And private label share higher in 12 months, lower in 12 months?

Yes. I mean we -- it depends on the category. In some areas, our private label share in nicotine is like over 60%, and that's on revenues. And in other places like oral care is 14%. I think it's all about gaining share for us and penetration. So yes, it will -- I believe it will continue to grow because that is the focus of all of our efforts. And in our biggest core business, we're about 30% share, which is high. So we -- I think we demonstrate when we focus on it, we can grow market share.

Good stuff. This has been great. I really appreciate your time. We could probably keep this conversation going for another 2 hours because it really has the potential to be that engaging. But alas, we have to cut it off now. Thank you so much for being gracious with your time and participating, and I hope the rest of your day goes great.

Thank you, Jason, and everyone. Be safe, be vigilant. It's not over yet. Bye.