Perrigo Company plc (PRGO) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the UBS Global Consumer and Retail Conference here in Boston. My name is Peter Grom, the U.S. Household and Personal Care Analyst here at UBS. And we are very excited to have joining us today from Perrigo, President and CEO, Murray Kessler. In terms of format for this afternoon, Murray plans to run through a short presentation on the company. After the presentation, we will then have Q&A. For those in the audience, you should have received instructions on how to submit or text questions to me. And if not, I believe there's some directions around the room as well. I have a few questions prepared myself, but we'll be happy to ask whatever questions come in on your behalf. Before we start, I am required to read a legal disclaimer. As a research analyst, I am required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company on which I express a view on this call today. These disclosures are available at www.ubs.com/disclosures. Alternatively, please reach out to me, and I can provide them to you after this call. So with that, Murray, thank you for joining us. I'll turn it over to you.

Thank you, Peter. As this is one of the first major consumer conferences that Perrigo has been to, I'm going to assume that while there are plenty of people who do know Perrigo that there are a number of people who this might be their first exposure. So I'm going to give you a little bit of Perrigo one-on-one. Like Peter, please look at our forward-looking statements and cautionary statements. But let's get right into what Perrigo is and why a company that used to be talking at pharma conferences is now talking at consumer conferences and a couple of years ago, 3 years ago when I joined had almost no consumer investors now is almost 100% consumer investors. And it starts with the fact that Perrigo practically invented the over-the-counter pharma company -- or consumer business over 135 years ago. And for the first 120 years successfully grew the business with a pure focus on consumer products and self-care products, which I'll talk a bit more about in a minute. Then came the introduction and acquisition of and entry into generic pharmaceuticals, which became sort of a little bit of a rocketship for a few years for Perrigo and became 1/3 of the company's sales and earnings and high margin. And then the bottom fell out of that generic market. And for the next 4 years, it became a huge drain on earnings. It became a valuation drain as the generic industry was suffering from price reductions and price concessions every year, and the multiples today are still -- many of those companies trade at 3, 4, 5x versus a consumer industry between 20 and 25x or 20 and 30x even. So if you look at that, what was a focused company became a company that didn't exactly know what it was and had walked away from its heritage. So in 2018, I was asked to come out of retirement and to do what I had done twice before, which was go into companies that were great companies that had lost their way a bit and to transform them back to their core. And in the first two times, that resulted in -- in one case, $8 billion or $9 billion of value creation and the other, it was about $15 billion, $16 billion of value creation. And there's a formula to do that, and we set targets for ourselves that we went under to deliver growth goals of 3/5/7, which I will tell you, every one of our goals was benchmarked on the consumer industry that we were going into. So we took the median in that industry and have said, if we can do that and can do that consistently and do it repeatedly, we ought to be able to have significant value creation, both through the growth in the earnings of the company and through multiple expansion. We are and always have been a self-care company, but it's important to understand self-care. Self-care is an exploding segment right now. Three years ago, IRI identified it as one of the disruptive categories in the world that was emerging with -- and that only got accelerated by the entire COVID pandemic, and let me take a minute to explain self-care. They identified it, by the way, as $450 billion global segment. The difference between where Perrigo was and evolving to a consumer self-care company was to take a company that was solely focused on treating illness, whether it was at the doctor or going to the pharmacy or over the counter yourself, to a company that not only treated illness but also prevented illness and promoted wellness, which would then open up tremendous growth opportunities for the company. Because we no longer just had to have a formula through the FDA that would -- after years of research and clinical trials or whatever, help somebody, but also we could do weight loss products or nicotine replacement products or oral care products or all kinds of different categories that would allow us to accelerate growth. To make that happen, the last 3 years has been a massive effort. Similar to the kinds of things, many of it to what I did in the last two transformations. But in this case, the last 3 years, 13 transactions, 5 divestitures, 8 acquisitions. The last one, the biggest and largest, HRA Pharma, which is hopefully, here in another couple of months, about to close. And with that, we are now, from a product and company portfolio, a pure-play consumer company. We also had to make significant investments. We invested in capacity. We invested in IT. We invested in people. We invested in our new product pipeline and built over $0.5 billion and replenish it every year of new products. We invested $130 million in IT and infrastructure. We strengthened the management team. In the first year, I think we either promoted or brought in from the outside pure consumer talent that was maybe half of the entire leadership team. We went after our cost structure and have been very aggressive in managing it and took out $100 million of operating expense. And we improved service, we built and invested and took a lead position in e-commerce, as I'll show you in a minute, and installed business intelligence capabilities to be able to go toe to toe with the best of consumer companies. Like my other two company situations, there was also not just this opportunity, but there was always some major issue overhanging the company. For my first one company, it was antitrust; for the second, it was a regulatory threat; and for here, it was primarily tax overhangs. And 3 years ago, we had $3 billion to $4 billion, when you included taxes and penalties of overheads, and we have almost made all of that go away, especially in the last year. So -- and in that last -- speaking of that last year, despite COVID, despite all the challenges we're all doing to keep our products even running, we had 3 major strategic milestones that completed our transformation. We closed the sale of our generic pharma business for $1.6 billion. We announced the acquisition of HRA Pharma for EUR 1.8 billion, and we resolved the $1.6 billion Irish tax NoA for $266 million, a very favorable settlement, even more favorable when you see that we won a case for $400 million. So we didn't pay for it with shareholder money. The goal initially of getting back into self-care was, besides being focused and more profitable and reliable and less uncertainty, was a starting point that said the highest correlation of value creation in the consumer industry, and we continue to monitor every year's revenue growth. And we put a priority on revenue growth, and we have returned the company, which for years grew, I mean, I'm not sure how familiar people are, but in the year 2000, Perrigo was like $800 million in sales and grown to we're over $4.5 billion, $5 billion today. But during a period of time from, let's call it, 2015 to 2018, the growth stopped, and it had slowed. And we reignited that growth through this strategy, by broadening, by going out and doing some of these smaller bolt-on acquisitions, by getting into new categories, filling white space, innovating and got the business growing 3%. And what's remarkable is we delivered on our 3% organic growth goal despite the fact that for us, we were very affected by the pandemic, more so than many other companies because a big chunk of our business is cough/cold. 20% of our business is cough/cold. Nobody got a flu last year. Literally, there were 0 flus and most of that 20% of the business went away. And despite that, we grew right through it in total. So the numbers would have obviously been even stronger. Good news, people are out and about again. Masks are off. This has been a robust 2 or 3 months and our cough/cold business is back. So between that, the growth that we have proven over time, the new product pipeline, our successes in other areas and an HRA acquisition coming, the company is going to have very strong growth in the years. Now to step back a second again, we're a company that is global in nature. Half the business, after the HRA deal closes, is in Europe. Half of it is in the U.S. It's primarily store branded business in the U.S. It's primarily national brands or country brands traditionally -- traditional brands in Europe. They're going to compete, and this is, I think, a huge statement here, in a new consumer segment. And I don't know how often new consumer industries emerge. But if you follow it, we started talking about becoming dedicated consumer 3 years ago. Around the same time, so did Sanofi, then shortly after Glaxo and Pfizer announced that they were separating their consumer assets, and J&J, you already have some others out there as well. Bottom line, within the next year, there is going to be a new $150 billion consumer segment that -- with experts and focused all on innovation and all the things you do in the consumer self-care world. Going into a little bit touch more detail. I'll go quickly, but a touch more detail. Our U.S. business is $2.7 billion of revenue, growing 2% to 3% In categories that are growing 2% to 3%, we tend to grow a little bit faster. And we have a high, I'll call it, CQ, high complexity quotient. One of the great strengths of Perrigo is how fast we are to market, how fast we get to the regulatory process and how full range of distribution we offer. We make 7,500 products in the U.S. across multiple categories and service 120 customer brands with a very successful e-commerce business that's now 10%. Perrigo I love because the brand names aren't ours. They tend to be the store brands in the U.S., and we're kind of the biggest brand company nobody has ever heard of. Perrigo is not as common a name because we're always using the Walmart name Equate or the CVS name or the Amazon basic care name, but people don't realize we developed all those names. And we then sell them to and help market and do the management of those brands for those leaders. When you look at it on a dollar basis, this is not wholesale dollars because we sell to the customer. But on a retail dollar, we're neck and neck. If you look at the latest 4 weeks, we passed J&J and we're between GSK and J&J. Bottom line, GSK, J&J and Perrigo in revenue, and dollars sold to consumers are about the same size in the United States. Switch over to volume as our products provide almost a 30% discount to the national brands, we are #1 in volume market share by far in the United States. And I just gave you this, but it's not your typical store brand math. Basically, our formula that we like to get to is a 30% savings for consumers, a 30%, say, retailer profit margin and a 30% gross margin for us. And that's sort of the winning formula of which segments we go into an which store brands we deliver. But if you want to look at on this slide, the retailer profit, what's staggering, and it's not the case in many instances, in many categories, is a retailer actually makes more money selling store brand products than they do national brand products by a lot, and they protect that and they invest in those businesses. And as a result, might surprise you to know that the biggest national brand in the United States and the over-the-counter is not a national brand. It's Equate by like 4x the size of the next biggest national brand. Let's move over to CSCI, $1.4 billion today in revenue, another $300 million, $400 million coming in with HRA, attractive categories growing faster, about 3% to 4% annually. And these are primarily traditional brands. We have 225 brands sold through 28 countries and 95% of that is in Europe. And like the U.S., 10% of that is sold through e-commerce. We're currently a top 10 player, and we play in cough/cold, lifestyle, personal care, derma products, vitamins, minerals, natural supplements and a number of strategic niches. The growth of the company is about to go through a scale acceleration with the purchase of HRA. HRA is estimated to add EUR 400 million in its first couple of years to Perrigo at a very high accretive gross margin, accretive growth rates. It's been growing double -- strong double digits for years and continuing to do that last year and the coming year, and it's #1 brands in everything they do, but a leader in women's health with ellaOne and NorLevo, a leader in blister care with Compeed, and a leader in scar care with Mederma. To put that in perspective, we just announced our year-end $2.06 of EPS. We expect by 2023, we're hoping to close this deal in the next couple of months. We have it estimated at midyear at about $0.30 of EPS this year, but a full dollar of EPS by 2023, with synergies. So that's obviously, against my 3/5/7 goals. We're talking, with the help of HRA, more like 33%. And to be clear, the goal was to sell Rx and buy back as much of that operating income we could in the consumer segments so to trade lower discounted EBITDA for higher value, higher-quality EBITDA. And we'll get -- within a year at the current growth rates, we'll get just about to that being a match. And over time, clearly, HRA wins. It also -- a lot of people said, you have enough scale in Europe. And the answer was we were almost there, but this changes that. This -- Compeed and ellaOne from HRA become our #1 and #3 brand gives us scale and markets. Examples would be Germany, Spain, where we were just not big enough to have the scale we needed to be able to leverage even our own brands. Huge, huge synergy opportunities, huge revenue opportunities. This will take the profile, put Perrigo's international operation in with the best of them, we'll take our margins to -- comparable to the industry, and we'll take the growth rates to probably top of the industry. Beyond HRA, that's inorganic, but we are just as excited about continuing the organic growth we've seen in the last 3 years. And the only thing I want to show here is that through share gains where it makes sense, through increased household penetration where it makes sense. We play in monstrous markets where there is significant opportunity, and we have targeted marketing programs to go after it, whether it's women's health and emergency contraception. With HRA that is in the process, in the last stages of applying to the FDA in the United States for the first birth control pill to be sold over the counter in the U.S., and we're optimistic about that in the next few years. But in every one of these areas, there are new products, new programs, white space opportunities, geographic expansion opportunities, et cetera. And just to give a -- this is just a sampling of the new products that have recently launched, whether it is the electrolyte product, which one of them was CVS' new product of the year, or XLS, which is our weight loss product or natural products, in licensing the Clorox Burt's Bees names or the switch product that we're switching of NASONEX, which will launch later this year, or dozens of other innovations within the store brand categories. Again, we have a $0.5 billion of new product pipeline. We've been launching $150 million to $200 million a year, getting about $50 million, $60 million, about 25% of that incremental each year. Another way we grow, and we're proud of this, was a big investment and we're continuing investment in e-commerce. When a lot of people got a big jump in 2020 with the pandemic, most of those companies pulled back this year. We grew 22% on top of last year's 109% growth, and we did it both in Europe and in the U.S. Area that we did get hit along with every other major consumer company out there is in the back half of the year with supply chain and distribution, freight costs for our oral care, containers going from $6,000 to $26,000 a container, lack of drivers in the third quarter. It was material price increases, et cetera, cost Perrigo about 400 gross margin points. And -- but for that, you probably -- I think we reduced like $0.50 in EPS for the year we just completed. Good news is we have line of sight. We believe we'll get 75% of that back over the next 12 to 18 months, and a lot of it's already happening. So we are already seeing the cough/cold recovery, which is high-margin items. That fills the plants back up, we get back the efficiencies, there are overtime costs. We are able to get -- while we still have to battle for employees like most companies are, the absenteeism that we were facing because of COVID feels like right now, it's behind us. And then there are a number of supply chain opportunities as well as the addition of very high gross margin HRA. So our job right now, we've done, I think, a very strong job transforming the company. The future growth is right in front of us with HRA, but we have to integrate it well -- close the deal, integrate it well. And then the second component is we've got to be scrappy and fight and get back a good portion of that lost gross margin. And with that, we'll obviously be much higher growth than 3/5/7. It's not just what we do, it's how we do it, and we take pride in -- we walk the talk with ESG. And we believe our products have competitive advantage here because part of what we're doing is bringing social benefit to the people around the world that either can't afford to go to a doctor or they can't even afford the national brands and going into high inflation and recession. We are an all -- a solution, right? We're part of the solution, not part of the problem. And we typically gain share during inflationary and recessionary periods, but we offer accessibility, affordability, reliability and we are very focused on sustainability and in our annual reports and proxies and everything you will see on United Nations goals and progress reports and an annual report on it. So goal for this coming year, we just gave guidance. Versus our 3% organic growth goal, we're saying plus 7% to 8% before HRA. With HRA, we're saying 21%. And the EPS number, 7% without it, and that's at the midpoint of the range. There's a range around those. But an exciting time. We've done a lot of work. I would have like to see a little bit more of that success play out in the marketplace in the back half of last year, but we dealt with the supply chain issues that the world did. So I'll wrap it up here, Peter, to say we believe Perrigo is a compelling investment. We're a focused pure-play consumer company. We think we have most of the COVID-19 and supply chain issues behind us. We're on track to close a highly accretive HRA deal. We pay a nice dividend, and there's potential for incredibly significant multiple expansion. With that, happy to talk.

Why don't we sit down right here, and we I can start. And if it's easier if you have questions and you just want to take your hand, just feel free to let us know about it. Yes. So thank you for that, Murray. I think, myself, those in the audience were a bit newer to the story, obviously, and kind of remember you from your tobacco days. So can you maybe walk us through what compelled you about coming to Perrigo, coming out of retirement?

Yes. I mean, listen, I was retired -- that was my second time I was retired. So I'm not good at retirement. But there was a hedge fund activist at Perrigo at the time, and they -- who I know well and came and talked to me about the opportunity and I studied it, and it started to feel real familiar to me. And it's -- at U.S. Tobacco, UST when I was there. Great brands had price erosion, had lost the largest antitrust case in the history, had lost its way. And it was a $2.7 billion company. When we were done 7 years later, it was $13 billion that we sold it to Altria. But again, great brands, good solid demand, good business, but it had lost its way with a number of businesses it was in and what it was focusing on and we had a big overhang. Same thing at Lorillard. I was Chairman and CEO of Lorillard. You had this massive overhang of the menthol debate and 95% of those sales were menthol, and we had to come in and deal with that and prove that we could compete in more than that. And we -- again, similar. Then you come to Perrigo and you say, well, overhang with a $3 billion, $4 billion, great company, great demand, supply chain issues. And this, again, this lost focus from what the company did best. And we had an opportunity to go back and focus the company, and it felt very similar. I mean to me, there's a -- you make your own decisions. But to me, the stock is dramatically undervalued and it had a history of disappointing, so people are wanting us to show them. But we -- you've got growth, you've got bought earnings, you've got billions of dollars of cash that are about to be deployed with great brands, a growing demand, sky is the limit. So I'm excited about the value opportunity, and I've been accumulating shares and I'm planning on benefiting from it.

There you go. I mean, so you showed the slide, obviously, a lot of different competitors in the space, right? And so -- maybe you can help me understand what differentiates Perrigo from those peers. What do you kind of view as your core strengths and then maybe what's your kind of competitive moat, if you will.

They vary a little bit, but to be clear, the space I'm defining is actually shaping right now, right? So that's interesting in itself, which I think will create an exciting time. Perrigo has a high CQ. Not a -- you've heard IQ, but our complexity quotient is tremendous. And that creates a tremendous moat, right? So we still do all the things any other branded company would do in the U.S. We are -- we manage the e-com for the customers. We manage marketing, package design, all these -- others, all the consumer work, the business intelligence, category management, all of those do, but we do it with a level of complexity that's remarkable. So for a national brand launching 1 item, that's usually us to duplicate that as 500 items. So I mean, it's massive. Then we have certain categories, depending on what they are in the regulatory space, we have a regulatory moat around us or core competency, in my opinion, that we're almost always first to market, first to file. So if there is an OTC, Rx OTC switch, we're the first to get there, and we have great resources to make that happen. And we are working on almost every one of those that could possibly switch, we'll be ready and traditionally have when those happen. There's another example, e-commerce. So our nutrition business, our infant formula business. There hasn't been a new infant formula that has been launched and -- or approved by the FDA in like 40 years. So I mean, it's -- and it's expensive to be in that business. And then from a quality standpoint, everything else, there's massive investments. So we have scale and breadth, right? At Lorillard, one difference is I had like 14 products, like 14 types of -- here, we have 14,000.

Yes. So that makes sense. And I know you have branded exposure, and we'll touch on that. But can you just help us understand the store brand competitive environment a bit? Just like customer concentration, market share contracts, pricing, just anything to help us understand what that market looks like and how you're positioned here versus the competition?

Well, I think we're going to have a different definition of competition. The national brands are my competition. There are a number of smaller companies that most people can't name that will cherry pick something on price and all that. And that's just part of our business. But we make our money and we differentiate ourselves by marketing and growing the business the same way national brands do. By innovating, by providing category management capabilities, e-commerce, all of the great service, all the things that you would -- to me, there's no difference. Like Equate is a massive brand. The -- CVS' brand, Amazon's Basic Care. Amazon didn't come up with the name Basic Care. They wanted to put it under their own labels. We developed Basic Care. Our teams do all the testing. And then in the end, we sell them the brand name for partnership and commitments and distribution, et cetera. The biggest difference is pricing on a national brand. So on my international brands' marketing, very similar, right? And we do advertising, and we do all kinds of things, very similar. In -- but in Europe or at a different company, if I wanted to take a price increase to offset inflation right now, I can take the price increase, in 2 weeks, the price is up. Because of the store brand and the relationship and the strong partnership we have with customers, we have to negotiate that. Our contracts allow it. In 20 years or whatever it was of no inflation, that resulted in every year, about minus 1% to 2% price decline, concessions. But because of the great value and switching, 5% volume. So our formula was always 5% volume, minus 1% to 2%, got your 3% growth. That gave up a little bit of gross margin. You have to identify $20 million, $30 million of cost savings out of your $2 billion to $3 billion cost base every year to offset that. That's kind of the winning formula. Right now, we've been able to do a little more pricing because of -- our customers want us to do well. They want us to survive, right? These were big numbers that came the way of the entire industry.

Yes. I mean obviously, inflation is a big topic. So -- how do you balance having store brands and your own branded portfolio?

It doesn't require a balance. I treat them equally. They have to -- I expect the same level of branded expertise out of the store brand group that I do. I have the same resources, the same talent. I switch the talent back and forth between Europe and U.S. We do the same consumer testing, the same IRI analysis, the same -- the same everything. The only really big difference is the pricing component of it. So I need to push harder on being the low-cost producer with the private label business.

Okay. And we're just kind of -- you alluded to this before, supply chain, inflation. I want to get to that. But maybe just to start, Russia and Ukraine. Do you have any exposure there?

Yes, a little bit. I said that on our earnings call. I mean, it's just a horrible situation to watch. I mean it's kind of heart break. We have 95 colleagues in the Ukraine. Two weeks ago -- 2, 3 weeks ago, I was -- tried to get them all out and we put together this whole plan and -- and then they wanted to wait and see, and then came the invasion and we were like, let's go and 94 out of 95 refuse to leave. They wanted to stay and fight for their country. And now some of them -- they want -- we're trying to help get some of their families out. So that's where our focus has been. But bottom line, the $10 million to $15 million of operating income for us, 1% or something, 1.5%, something like that. But we'll deal with that. But...

And obviously, a big topic has been the supply chain disruptions. Like can you maybe talk to what you're seeing from a supply chain perspective? I think you kind of alluded to it before in your prepared remarks that you're starting to see some improvement there, but maybe is that true? And then maybe what actions have you actually taken to overcome these issues?

Well, I mean, it came out of nowhere. And it's just hard sometimes when you're explaining to an investor, like, well, how could you not see that coming. I'm like, well, because we have like unbelievable demand, the product all made and who would have in the right mind would have thought drivers wouldn't it show up. Like we do 55 trucks a day out of our Michigan plant. 15 drivers a day just started not showing up. Like that's 1/3 of your volume, like every day. And you're like, well, surely, there's some mistake here. And then you call the -- you've got the brokers and the companies, and they're like, oh, yes, you're all set for Wednesday. And then you finally get that and then you go to Walmart or you go to somebody else and look, we don't have anybody to unpack the trucks, just leave them here, we'll get them on back in the next 3 days. Well, they're are temperature-controlled products. They're -- and so everybody was scrambling. For us, what did we do? And it's different problems for different supply chains. We had hit hard by China and the whole situation on freight. We had containers going from $6,000 to $26,000. For our oral care business, that's a $30 million hit. That's huge for that piece of business. And you couldn't sell -- with great demand, you couldn't get the product to the stores because you couldn't get it off the boats. In the beginning, we were airfreighting now we have solved and we shared. We had just switched all those oral care products to the Perrigo distribution system. Worst possible timing, right? So -- because it's low margin compared to -- didn't need to be on a temperature-controlled truck and we have no driver. So we moved it all back again into the third-party. I mean the poor people that we had acquired, Dr. Fresh must have thought we were nuts. But in the meantime, they're back and they're being distributed, we just place longer orders, a little more working capital. But instead of 2 months or 3 months, you add 1 to 2 months lead time to -- and you may be a little off on your inventory, but we did that. We added regional carriers. In the beginning, we had people from -- that were supposed to be making cough/cold and there wasn't the orders go into the distribution center and help. We've fixed a lot of those staffing issues and then from a production in the plant you had. For us, the worst 2 months of COVID absenteeism was December and January, that just passed, at the end of the 2 years with Omicron. Even though it wasn't as -- it didn't have as severe of symptoms, it still -- it's spread rapidly. So we had like 300 people a day out of 1,100 for 6, 7 weeks. Thank goodness, that wave has passed, and now we're back down to normal absentee level. So I mean, the cost is still high. But we're shipping now everything that we make and demand remains very robust.

Okay. That's good.

We've got to work those gross margins down.

Go ahead.

Given how attractive you view your stock price, how do you guys think about balancing share repurchases with M&A?

Well, my -- we're done M&A for a while, right? We have to close this HRA deal, and that will take all the cash and then it will be a little higher levered than I like. We'll be just, depending on whether you're net or gross, we'll be just under -- net, just under 5x. And from a rating agency standpoint and all that, we will have a lot of excess cash over the next few years, and we'll pay some of that down. And then depending on the stock price and any excess cash over that will be -- is it share repurchases, et cetera. But -- we did 13 transactions. I pushed Perrigo as hard as it can be pushed to as quickly as I could transform it as possible. Right now, it needs to catch its breath. It needs to optimize the supply chain within that. And I think there's a lot of money there. It needs to get these things fully integrated. It's got to get the HRA deal done and then pay down a little bit of debt, just now go about the business of performing before we go to the next step. I don't have cash to do share repurchases at the moment. And operating income, I needed to replace that $200-plus million that I lost or it wouldn't support the overhead structure.

What do you think the market is missing? I mean, you really pushed hard in transforming the business to probably restore it. Clearly, there's lots of comps at higher multiples. Is it -- when you talk to investors who are maybe apprehensive or other market participants, what do you think explains the value which you have that...

I think you have 2 kinds of investors, and you also have our purposeful shifting of the investor base, too, which didn't help, right? So -- when we sold -- there were -- most consumer people wouldn't get -- I know as long as we had Rx and as long as we add the overhang. So you've had a massive turnover in the last 6 or 7 months to convert it from specialty pharma. Specialty pharma,didn't get my story. You can listen to me. I say things like supply chain disruption and in the group that -- of investors that regular pharma didn't have those same issues. So they look at me like, well, why are you having those problems? Like is it just you? And I'm like where you talk market share and volume share and that just wasn't a typical dialogue. So this group speaks my language. When we sold Rx, we had a certain number of shareholders who had to get out, right? We had -- we were on the Israeli Stock Exchange, the TASE, and we said, well, the stock is down right now, let's just get it over with. We sold the Rx division wide bin. In Israel, it's 20% of our stock, that weighs 25 million, 30 million shares that traded and it's done as of about a month ago, I think, somewhere right around there was a lot of downward pressure. In general, Perrigo also had a history of something going wrong. I mean that's just the truth. Now when I presented the sale of Rx to our Board, I put all the bad things that happened on Perrigo and put them in a column on the consumer side or on the Rx side. and every one of them was on the Rx side. But if you were owning Perrigo for a while, it was like, oh, there's a DOJ problem. There's opioids. There's the Irish tax bill. There's the albuterol recall. They were all from that noncore piece of business. So I think we need to perform. I will say -- and it's recent, right? We just got out of -- in the last few months getting out of the Irish overhang and some of these others. But I think there needs to be a higher level of confidence in the company. Even though we had -- prior to this -- I had to take earnings down, which the timing was terrible, but the supply chain gross margin WACC came to everybody but it wasn't well timed for us. We had, had 9 quarters in a row of meeting or beating before that, and we weren't getting traction with that. We will. We need to hit these numbers consistently, perform, the multiples just get too far out of line or -- and if it doesn't perform, it will perform because you won't survive at those multiples.

Well, we have -- I think we're pretty much out of time, Murray. I want to say, on behalf of UBS, and those in the audience, thank you for joining us today. We wish you the best of luck moving forward.

My pleasure, and thank you for your interest in Perrigo.