Good morning and welcome to the Perrigo second quarter 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Brad Joseph, VP Investor Relations. Please go ahead.

Good morning and welcome to Perrigo’s second quarter 2022 earnings conference call. I hope you all had a chance to review the earnings press release we issued this morning. A copy of the earnings release and presentation for today’s discussion are available within the Investors section of perrigo.com website. Joining today’s call are President and CEO, Murray Kessler, and recently appointed CFO, Eduardo Bezerra. Welcome, Eduardo. I’d like to remind everyone that during this call, participants will make certain forward-looking statements. Please refer to the important information for shareholders and investors and Safe Harbor language regarding these statements in our press release issued earlier this morning. A few quick items before we start. First, unless stated, all financial results discussed and presented are on a continuing operations basis. They do not include any contributions from the divested Rx business, which was accounted for as discontinued operations prior to its sale. In addition to other non-GAAP adjustments as described in the appendix, adjusted profit measures including adjusted EPS and adjusted operating income exclude from the prior year period certain costs incurred to support the operations of the Rx business which were reported in continuing operations. See the appendix for additional details and for reconciliations of all non-GAAP financial measures presented. Second, organic growth excludes acquisitions, divestitures, and currency in both comparable periods; and third, management’s discussion will focus solely on non-GAAP results except as otherwise expressly noted. Now I would like to turn the call over to Murray.

Thank you Brad, and good morning everyone. I want to recognize the entire Perrigo team for a truly remarkable quarter. We are executing well against our self-care strategy, which is clearly the right direction for our business, and even though we continue to operate in an extremely difficult macroeconomic environment, the team once again achieved a number of major accomplishments during the second quarter. Let me be specific. First, we closed on the HRA transaction which had an immediate impact on the quarter and is setting us up for outsized growth. Two, we closed on $2.6 billion in senior secured credit facilities, locking in favorable rates and further certainty. Three, we received FDA approval of and launched Perrigo’s first-ever branded Rx to OTC switch, Nasonex 24-hour. Four, we filed with the FDA for the first-ever Rx to OTC switch for a daily birth control pill, the Opill; and five, we worked around the clock at our infant formula facilities to deliver 72 million more infant feedings year to date than the same period last year as we continue to do everything we can to help fill the severe shortage in the U.S. created by a competitor’s recall. We did all of this while delivering year-over-year constant currency top line growth of 20%, gross profit growth of 17%, and operating income growth of 8%. We also achieved a 310 basis point sequential improvement in Perrigo’s gross margin as promised. Net-net, I’m pleased to see strong fundamentals in our business and a full pipeline of significant innovation. Looking at the quarter in a bit more detail, we delivered strong top line growth with reported net sales growth of 14%, or as I just said, plus 20% growth on a constant currency basis. This was driven by robust organic growth of plus-17% stemming from continued strength in our product categories, including cough-cold and infant formula, and channel expansions, including ecommerce. Worth pointing out, the bulk of our 17% organic growth was volume mix with only four points of that growth coming from price. Sizeable volume mix growth, price increases, and the incremental contribution of HRA revenues for two months overcame significant inflationary pressures on costs, the Latin America and ScarAway divestitures, and the higher operating expenses in the quarter versus last year, which included $8 million of costs not expected to repeat. Higher year-over-year interest expense and a slightly higher share count led to constant currency diluted EPS for the quarter of $0.49, or $0.43 including adverse currency translation. Importantly, top line growth year over year accelerated for the fifth quarter in a row as consumer demand for the categories we compete in is very strong and our inflation-justified price increases taken to offset severe inflation-related cost increases are taking effect. As I said, HRA, which is included in our results, made an immediately positive impact on the quarter, contributing $65 million in constant currency net sales with only two months of accretion following the April 29, 2022 close. HRA’s high gross margin had a 220 basis point positive impact on Perrigo’s consolidated results. We expect the long-term benefits from the acquisition of the fast-growing HRA portfolio to be significant, including our estimate of over $40 million in cost synergies. As we align our strategic growth pillars to incorporate the HRA portfolio, we’ve created two new product categories we are reporting in our disclosures: women’s health and skin care. Both will be important to the future Perrigo growth story. Skin care is now our second largest global category, 15% of global sales. The segment is growing strongly and includes major brands like Compeed, ACO, Mederma, and Emolium. We view women’s health as potentially our largest and most relevant global growth opportunity and we look forward to sharing more about our plans in this area in the near future. With those new product category definitions as part of our disclosure framework, let’s take a closer look at revenue growth for the quarter. As you can see, strong double-digit growth was experienced across both consumer self-care Americas and consumer self-care international. It was also strong across our major product categories. Let me give you a few notable highlights. One, our upper respiratory revenues grew 44% versus year ago globally and our related pain and sleep aid revenues grew 14%. We attribute this to a rebound in cough-cold sales as compared to last year’s sales which were still depressed due to COVID-19 related lockdowns. That, in combination with an extended cough-cold season this year and a good start to the global allergy and hay fever seasons, accounts for the strong growth in this product category. Two, a 31% increase in our nutrition business was driven by infant formula which primarily benefited from the surge in demand in response to the competitor brand recall I just mentioned. Three, a 30% increase in our skin care business relates to the addition of Compeed and Mederma and continued strong growth of ACO; and four, our women’s health business grew 77%, due mainly to the addition of the HRA businesses, which also benefited from the increased demand spurred by the public concern before and after the recent judicial decision in the U.S. related to Roe v. Wade. It’s worth noting that our shipment growth rates were somewhat higher in the quarter than the consumer off-take growth rates. I note that this is not due to increased inventories at customers; rather, if you remember last year’s second quarter was slightly depressed due to inventory reductions by our customers, the absence of that reduction this year gave an extra benefit to Q2 sales. In fact, our inventory levels are where they should be, with the obvious exception of infant formula. Another positive trend in the second quarter was the share trend between total store brands and national brands. Year-to-date, total store brands have gained more than three share points on a dollar basis. While early, consumers are clearly shifting to store brands as a result of inflation. As we discussed last quarter, our infant formula business continued to gain volume share in the non-WIC category, up more than 10 share points versus prior year. These gains are due to the launch of our store brand hypoallergenic formulas and, of course, the shortage created by the competitor recall. We continue to run our factories around the clock and have optimized our product offering so that we can produce 117% of our normal full capacity. We’re doing everything we possibly can to help feed America’s babies during this crisis. Importantly, this unusual circumstance has given many families the opportunity to try a private label infant formula for the first time, a good portion of which we believe will be sticky. Latest survey results show that more than one in three pediatricians are recommending store brand formula to parents, up from one in five in October of last year. These results illustrate that our physician-directed marketing efforts are making significant progress, and this is an important trend as the parent or caregiver who purchases infant formula typically turns over every 12 months. Our investments over the last few years in our ecommerce business continue to deliver significant growth for Perrigo. Ecommerce sales in the first half of the year grew more than 25% versus the strong prior year period, driven both by the Americas retail customers and international direct-to-consumer initiatives. Ecommerce sales are now over 12% of Perrigo’s global sales. During the quarter, the team launched our first-ever branded Rx to OTC switch, Nasonex, now available on retail shelves. As a reminder, this was a first cycle approval and illustrates the robust regulatory capabilities at Perrigo. Congratulations to the entire team on this important launch. Another example of our regulatory and Rx to OTC switch capabilities at Perrigo is the recent filing of our application to the FDA for the potential first-ever over-the-counter oral contraceptive, the Opill. This filing represents a tremendous amount of work done by our HRA colleagues, and our commitment and their commitment to women’s health. It’s a meaningful step forward to expanding affordable access to daily birth control products for women in the U.S. at a time when it is most needed. The outcry of support for this filing was overwhelmingly positive and we hope to launch this product in the U.S. late next year, pending FDA approval, of course. Another bright spot in the quarter was gross margin. Perrigo’s second quarter gross margin expanded sequentially from the first quarter by 310 basis points, well on the way to our goal of recapturing 400 to 500 gross margin points versus the first quarter by year end. I don’t want to sugarcoat this in any way - rising input costs and severe labor shortages are still part of this dynamic macro environment. These headwinds have yet to ease, but despite that the price increases we’ve been able to implement along with a number of procurement actions give us confidence that we will still reach our gross margin goal. As I discussed earlier this year, our self-care transformation is complete. Now is the time to optimize and accelerate the new Perrigo. An important part of that next phase is our global supply chain initiative designed to maximize productivity and efficiency in order to deliver world-class service levels and enhance gross margins for years to come. The design phase is basically complete and we’ve begun what will be a five-year phased optimization which ultimately should deliver between $100 million and $300 million in net cost savings. Let me give you a few examples. First, we’ll be upgrading our demand planning systems utilizing the business intelligence and global data warehouse we put into place over the past few years. This is expected to result in reduced product obsolescence, reduced inventory, and increased productivity in our facilities. Also, increasing productivity will be the implementation of a Perrigo work system that will provide visible and meaningful metrics at the shop floor level to enhance agility, which will again enhance productivity and free up capacity. We will be optimizing and streamlining the portfolio by SKU to reduce complexity. Eighty percent of the complexity in our system is not consumer-facing. This is a big opportunity for both us and our customers. In a number of facilities, we will be modernizing manufacturing equipment to increase automation, increase capacity, and reduce business interruption risk. The final example is we will be creating centers of excellence for our different product streams at key locations around the world. Hopefully, this gives you a flavor that our commitment to profitable growth, growing margins, and superior service is not a short-term exercise. It’s part of the fabric of Perrigo Company and our culture. As always, there will be a cost required to achieve these savings, and I look forward to sharing the entire plan and the costs required to achieve them in more detail at the appropriate time. In closing, it was a solid quarter. I’d even say it was an extremely strong quarter in the context of the headwinds we continue to face. We are benefiting from strengthening fundamentals, margins that have begun to grow again, and a strong flow of innovation. We know our new self-care strategy is correct and our emphasis going forward is to optimize the newly configured company against this strategy and to accelerate profitable growth. Our priorities are to continue to drive growth in our six strategic product category pillars, successfully integrate HRA and achieve the related cost synergies, begin implementing the supply chain reinvention program with an eye to enhanced gross margins, and to continually improve our organization and our culture. And of course, we will remain mindful of the difficult headwinds we and everyone else face in the short term. We will continue to adjust to handle those headwinds, but my big message is the tremendous future that has been set up for Perrigo and how it is all coming together as originally planned. With that, I’ll turn the call over to our CFO, Eduardo, to discuss the financials in more detail. Eduardo?

Thank you, Murray, and good morning everyone. Before diving into our second quarter results in more detail, I would like to take a moment to introduce myself and share some perspectives from my first three months as CFO at Perrigo. Prior to joining the team, I had a broad base of responsibilities that I think are particularly applicable to the work ahead of us at Perrigo. For the past three years, I held the CFO position at Fresh Del Monte, a publicly traded global organization with a complex supply chain. Overseeing an operation that had to deliver perishable foods across all five continents in a matter of weeks qualifies me well for a company that makes products with two-plus years of dating, such as Perrigo. Prior to my time at Fresh Del Monte, I spent 21 years at Monsanto. There I held various positions from finance to commercial and strategy. I held CFO positions in various business units, led implementation of a global finance transformation while upscaling their global finance short service platform, and eventually the integration efforts as part of the buyer acquisition. Over the past three months, I have been busy getting to know Perrigo’s business and our outstanding team members around the world. I took the time to visit our West Michigan facilities, met our CSCA sales and marketing teams, met with our CSCI leadership team, and had the opportunity to welcome our new colleagues from HRA in Paris. I would say the constant theme from my interactions so far is the passion and commitment that our colleagues have for their work and for the Perrigo vision. I’m really fortunate to lead such a talented and capable global finance organization and to be part of an amazing leadership team. As we look ahead at our priorities from a finance perspective, there are a few topics that I have brought to the top of my list. First is delivering on our financial results, both earnings and cash flow, which remain on track to achieve this year on a constant currency basis despite continued macroeconomic volatility, which will translate into positive operating cash flow. Second is recapturing gross margin, which we made significant progress in during the second quarter with a 310 basis point sequential improvement versus Q1 in gross margin, but we have more work to do. Third, the team is well underway to reinvent our supply chain with a goal of optimizing our ability to deliver our needed self-care products to consumers and customers. As Murray stated, we look forward to sharing more details about this soon. Let’s now take a look at our financials, starting with our GAAP to non-GAAP summary. We reported a consolidated GAAP loss from continuing operations of $65 million for the second quarter of 2022, or a loss of $0.48 per diluted share. On an adjusted basis, net income from continuing operations was $59 million and adjusted diluted earnings per share from continuing operations was $0.43 per share, or $0.49 per share on a constant currency basis versus $0.50 per share in the prior year quarter. A few adjustments to the GAAP P&L this quarter are worth noting. Second quarter 2022 pre-tax non-GAAP adjustments totaled $186 million, primarily driven by adding back amortization of $63 million and acquisition and integration-related charges of $101 million. Full details of our adjustments can be found in the non-GAAP reconciliation table attached to this morning’s press release. Non-GAAP tax adjustments for the quarter were $62 million, primarily driven by the tax effect of pre-tax non-GAAP adjustments. These led to an adjusted effective tax rate for the second quarter of 2022 of 23%. Turning to our quarterly results on Slide 23, let’s walk through the highlights. Perrigo net sales for the second quarter increased 14.3%, including a six percentage point headwind from adverse currency movements. Organic net sales increased 17.2% driven by solid performance in both segments stemming from strong consumer demand. Gross profits grew 8.7% or 17% on a constant currency basis versus prior year, driven by higher volumes and increased pricing as well as the addition of HRA. These increases offset higher costs, including cost of goods sold inflation, increased freight expenses, and lower plant productivity driven by tight labor market conditions, specifically in our U.S. facilities. As a result, gross margin in the quarter declined 190 basis points versus the prior year. Operating income was relatively flat year-over-year but grew 7.9% on a constant currency basis. Favorable gross profit flow-through was partially offset by higher operating expenses driven by the inclusion of HRA in addition to higher employee and distribution costs. Operating margin was 160 basis points below the prior year, but again we achieved the sequential improvement of 230 basis points versus Q1. Turning to our segment results, CSCA net sales increased 17% compared to last year driven by continued strong demand for cough and cold products and strong performance in our nutrition and contract businesses. Gross profit increased by 3% versus the prior year as the flow-through of strong top-line results offset significant inflationary cost pressures in freight and cost of goods sold, in addition to the lower U.S. plant productivity I just mentioned. These factors, however, led to a gross margin decline of 380 basis points versus the prior year. As expected, CSCA adjusted gross margin grew 290 basis points versus Q1, driven by favorable mix and positive pricing. Operating income for the quarter was $105 million, slightly below the prior year as favorable gross profit flow-through was offset by higher distribution expenses and the year-over-year impact of the divestitures. Looking at results for the CSCI segment, net sales on a constant currency basis increased 25.8%, inclusive of a positive benefit from the addition of HRA. Organic net sales grew 10.6% driven by continued demand for cough-cold and flu-related products, as well as a rebound in categories impacted by COVID in the prior year, including sunburn care and head lice offerings. Pricing was also a positive in the quarter. Gross profit was $206 million, up 31.9% on a constant currency basis driven by the addition of HRA, increased sales volumes, and pricing. These factors drove a 240 basis point increase in adjusted gross margin versus the prior year. Operating income increased 36.3% on a constant currency basis. Favorable gross profit flow-through more than offset higher operating expenses, which increased due to the inclusion of HRA as well as higher employee and travel-related expenses as our sales force is 100% back to meeting in person with our customers. Moving now to the balance sheet and operating cash flow, cash on hand was $485 million at the end of the second quarter, down from $2 billion at the end of the first quarter due to the $1.9 billion cash payment for the HRA acquisition which was partially offset by incremental borrowings from our refinancing and cash generated in the quarter. Operating cash flow for the first half of the year was $62 million, which represents an increase in operating cash generation of $144 million versus the same period last year. In addition to acquisitions and divestitures and cash movements related to our debt refinancing, we invested $49 million in capital expenditures and returned $17 million to our shareholders through dividends during the first half of the year. Now that the HRA acquisition is closed, our capital allocation priorities are, one, we remain committed to growing our dividends. We have a strong track record of accomplishing this with 18 consecutive years of dividend increases. Two, we will continue to assess capital needs required to optimize our supply chain and operations; and three, we plan to reduce our debt over the next three years with an ultimate leverage target below four times, in addition to assessing the potential for share repurchases if appropriate. Looking at our fiscal 2022 guidance on Slide 27, given the strength of our results, we are increasing our organic net sales year-over-year growth range to 9% to 10% from 8% to 9% previously, while reaffirming our all-in year-over-year net sales growth range of 8.5% to 9.5%. The increase in organic net sales growth outlook is expected to be offset by the worsening impact of currency translation. Our updated adjusted diluted earnings per share range is now $2.25 to $2.35 per share versus the previous range of $2.30 to $2.40, while there is no change to our thoughts on delivering a constant currency EPS range of $2.40 to $2.50. In closing, I’m excited about our business and we continue to see momentum across both segments. Our team continues to deliver strong results in a very dynamic macroeconomic environment and we remain focused on factors that we can control. I look forward to meeting many of you over the coming days and months.

The first question is from Stephanie Wissink of Jefferies. Please go ahead.

Hey everyone, it’s Chris Neamonitis on for Steph this morning. Thanks for taking the questions and congrats on a nice quarter. First, we have a two-part question around trade inventory levels. I think you commented on this earlier but wanted to confirm, so could you give us an update on what you’re hearing from the retailers, and as you think about the growth outlook for the year, is there any way to break out how much you think it is takeaway driven versus maybe more of a reflection of lagging inventory levels? Then the second part to that question, as a follow-up, would be with the color on strong demand trends, could you help us think about demand levels relative to your current available capacity?

Let's focus on our core over-the-counter business in the U.S. The European figures are straightforward since there is no inventory and they are tracked through pharmacies, which align with consumer takeaway. The U.S. business is also performing steadily; the OTC sector shows growth, even if it may seem higher at first glance. We estimate about 18% to 20% growth in OTC, while IRI takeaway is around 7% to 9%. When factoring in ecommerce and major retailers not captured by IRI, the growth is closer to 9%. Adjusting for last year's Padagis business, which was previously reported internally and then as external sales, our numbers stabilize to about 9% to 10%. Therefore, consumer takeaway closely matches what we are shipping, staying consistent. Our inventory levels are appropriately aligned, although we had a slight advantage in cough-cold due to last year's reductions, but it's not enough to significantly impact our future operations. I am optimistic about the U.S. OTC products. Turning to nutrition, it mainly concerns infant formula. We are keeping pace, but we cannot meet the entire demand at this moment. After producing 70 million more feedings at over 115% capacity, we must take necessary breaks to maintain factory safety and cleanliness. While we can't keep operating continuously, we expect that once retail shelves are replenished and consumers feel secure about availability, the supply will continue for several months to restore both wholesale inventories and our stock levels, which I previously estimated would take until the end of the year, and I still believe that to be the case. Regarding oral care, we have successfully restocked our inventories, although we faced challenges importing products from China and dealing with freight issues. We are in a better position now. I have consistently noted that the fundamentals are strong. However, the primary concern that keeps me up at night is labor shortages. This situation has stemmed from COVID and other disruptions, and we continue to combat these challenges. Our main focus currently is ensuring we have enough personnel to operate the third shift to satisfy demand. We are actively addressing this issue, and while we are currently short-staffed, we are working on it every day.

Okay, that’s very helpful, and that segues well into my next question, I guess. Just given some of the choppiness in the macro supply chain, right - I know you flagged this, but could you comment on any sort of conservatism in gross margin expectations as we move through the balance of the year? Thanks.

I would have mentioned last quarter that I was likely conservative when I anticipated a recovery of 400 to 500 basis points, as we ended up with 300. However, costs have continued to rise, so I’m pleased I took a conservative approach. This allows us to stay on course to meet our objectives while managing the additional costs and productivity challenges from the labor situation. I don’t see much potential for improvement, but I believe we are on track.

Thank you. Next question, please? Kate, are you there?

Yes, I am. The next question is from Elliot Wilbur of Raymond James. Please go ahead.

Thanks, good morning. Fast forwarding and thinking about this year’s cough-cold season, Murray, and some of the absorption issues that the company encountered over the last 12 to 18 months with respect to that product category, I know you mentioned in the text that you have experienced some lower plant efficiency issues, primarily due to the labor shortages. But specifically with respect to that category, how should we be thinking about your per-unit costs on that line headed into the peak cough-cold season?

I’ll address this briefly, and Eduardo can add to it. I would have anticipated some improvement compared to last year, but ongoing labor shortages are hindering our productivity. Until we fill the third shift positions and can meet the demand and plans we have, the situation will not be worse than before, but it’s not improving as quickly as I would prefer. On the positive side, we have better pricing, which should help. Our original estimates exceeded my expectations, maintaining our current position, and I still expect an overall margin recovery of 400 to 500 from the first quarter to the fourth quarter.

Could you repeat the pricing realization benefits number you provided for the quarter? I believe you mentioned 4%, but I want to confirm if that's accurate. Additionally, what is the status of your planned pricing actions for the year? I recall you mentioned that you couldn't implement changes as swiftly as others.

I mean, there’s still north of 60% of the pricing actions that we have gotten approved at retail yet to hit, so they’ll hit in the third and the fourth quarter, and it is 4% for the first quarter. Remember, that’s the average across all of the businesses. In certain categories, it’s more aggressive, and in super-competitive categories, it’s less. That’s the blended average, and that compares to years and years and years of 2% to 3% pricing erosion, so it’s a pretty big swing for us. On your last question, I want to make sure I’m answering it. You are correct that cough-cold costs will look better because we are back producing cough-cold, and now the productivity issues I talked about now with labor are kind of blended across the board. But I think the good news if you’re watching the Perrigo story is gross margins are growing again.

Okay, and for the last question, I know you plan to offer a more detailed perspective in the future, but is there anything you can share before year-end about the women's health business outside the U.S., specifically regarding the potential to expand the recent OTC contraceptive approval in the U.K. to other regions? Are there any additional improvements on the horizon?

We are establishing a dedicated business unit focused on women's health, which is a significant opportunity for us, especially with our LO1 product being available in around 80 countries. Currently, the Opill is in the filing process in the United States, alongside filings in at least three other European countries, although those are not progressing as quickly. The FDA has a standard evaluation period of about 10 months, and we anticipate launching later this year. There is considerable support for this application from various groups, including the AMA, the Gynecological Association, and numerous congressmen. The key question is whether the review process in the U.S. can be expedited. If that happens, we will also secure the necessary investment and share that with you. Our women’s health strategy extends beyond just contraception; it encompasses various stages of a woman's life, and we'll present a comprehensive plan soon. At Perrigo, we already produce several other related products, and we see this as a significant opportunity to establish a strong presence in the global market.

Okay, thank you.

The final question today comes from Chris Schott of JP Morgan. Please go ahead.

Hey guys. Just my first one was when I think about gross margins in the second half in this 37% to 39% range, is that starting to get back to, I guess, a normalized level prior to some of these supply chain initiatives, or should we think about there being more gross margin recapture to think about, I guess as we go into 2023?

I definitely think you should be considering more. While pricing is a driver, productivity is another issue we will resolve just like we tackled the distribution challenges and other past issues. That is a significant factor. We are seeing obsolescence numbers related to the cough-cold season and shelf life, along with several throwaways. You've noticed a few one-time occurrences over the last couple of quarters that differ from the previous quarter, but this is all part of recovering from a disrupted business. The bulk of the 37 to 39 range largely comes from HRA, so the depressed core margin is still an opportunity. The supply chain initiative I mentioned, which is set to generate between $100 million and $300 million, is aimed at achieving gross margin growth and progression for years to come, not just for 2023.

Okay, perfect. The other thing I wanted to understand is, considering the current economic environment, can you discuss how a recession would impact your business? Reflecting on 2008-2009, that period brought significant advantages. Looking at the current profile, it appears that the company is more balanced between some international national brands and the U.S. store brand business. Can you elaborate on how a potential recession in the coming year might affect Perrigo?

I believe you answered the question well. We are more balanced than we were before, and I'm already seeing some benefits. Every major retailer we work with mentions in their conference calls that they are experiencing a shift towards private label or store brands. We included a chart in our presentation showing most of our share recovery from what we lost last year to national brands. In OTC, we've improved from approximately 27 to 29, which represents a 300 basis point recovery in the past four to five months. Our switching studies now indicate a shift from national brands to private label and store brands, which should be beneficial if history is any indication. However, we must be mindful of inflation in Europe, where we are more brand-focused. Thankfully, we have unique selling propositions, and we haven't been overly aggressive with our pricing. Our price gaps haven't widened, so the market's conditions will determine our trajectory. I'm proud of how we've restructured Perrigo to create a more balanced portfolio, now roughly half international and half U.S., and split evenly between store brands and branded products. This should make us less vulnerable to external factors in the mid to long term and allows us to grow the business based on strengthening fundamentals.

Perfect, and just one last question from me. Can we get an update on the HRA deal from last year? You mentioned that it would contribute roughly a dollar of accretion. I'm curious if that target still stands, or if we need to reconsider it due to the macro environment. Any insights on that?

I think you need to adjust it for currency, and that affects it. I talked about $150 million in operating profit impact, and we’re right on that. To be fair, I am still working through with the accountants the cost of achieving some of those, how much hits the P&L or how much is adjusted, etc., but you will have a clear line of sight to that $150 million that we talked about on day one.

Great, thank you so much.

You can calculate the impact of the currency. When I mentioned it, the exchange rate was $1.19.

This concludes our question and answer session. I would like to turn the conference back over to Murray Kessler for closing remarks.

Thank you everyone for your interest in Perrigo. My main takeaway for this quarter is that, having been here for almost four years, we have navigated through transformative years and are now focused on accelerating margins and achieving profitable growth. Throughout the quarter, I noticed a series of wins that resulted from years of effort, including filing wins, the Nasonex switch, and the filing of HRA, along with the positive inclusion of HRA results and share gains across the company. The energy within the company is palpable. Although we continue to face a challenging macroeconomic environment, our focus is on delivering strong numbers. I am particularly excited about the progress of this new company configuration as we move forward, which I believe will lead to significant advancements in our self-care strategy and the value it can generate. Thank you for your interest, and we look forward to speaking with you next time.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.