Good morning, and welcome to the Perrigo Fourth Quarter and 2023 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Please be advised that this call is being recorded today, Tuesday, February 27, 2024. I would now like to turn the conference over to Bradley Joseph. Please go ahead.

Good morning, and welcome to Perrigo's fourth quarter and fiscal year 2023 earnings conference call. I hope you all had a chance to review our release issued this morning. A copy of the earnings release and presentation for today's discussion are available within the Investors section of the perrigo.com website. Joining today's call are President and CEO, Patrick Lockwood-Taylor; and CFO, Eduardo Bezerra. I would 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 release issued earlier this morning. A couple of housekeeping 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. Second, organic growth excludes acquisitions, divestitures, exited product lines, and currency in both comparable periods. All comments related to constant currency remove the impact of currency translation versus the prior year by applying the exchange rates used in the comparable measurement in the prior year's financial statements. And third, Patrick's discussion will focus solely on non-GAAP results except as otherwise noted. See the appendix for additional details and for reconciliations of all non-GAAP financial measures presented. And with that, I'm pleased to turn the call over to Patrick.

Thank you, Brad. Good morning. Good afternoon, everyone. I'll start the call with a few opening comments. First, I'd like to thank all of our 9,000-plus strong Perrigo team, who work relentlessly to deliver world-class self-care products to consumers. I truly appreciate all that you do each and every day. We ended 2023 with our international business firing on all cylinders, while our US OTC business is performing well amid a normalizing consumer environment as store brands continue to gain market share from national brands. In addition, our accretive initiatives with synergies from the HRA acquisition and our Supply Chain Reinvention Program are adding value and remain on track. We were proud to also achieve a multidecade effort to win FDA regulatory approval for Opill, the first women's contraceptive to be available over the counter in the United States. During 2023, these positive benefits offset the impact of evolving regulatory guidelines in our infant formula business. For 2024, our team is working to quickly implement a new action plan to augment and strengthen our infant formula business amid these evolving regulatory expectations. We now expect stabilization during the second half of 2024, slightly later than previously planned. Now looking at the fourth quarter and our 2023 financial highlights. Net sales in fiscal 2023 grew nearly 5%, driven by our international and core US OTC businesses. In addition to benefits from acquisitions, which more than offset headwinds in the legacy infant formula business. Organic net sales for the year increased 2%, including an unfavorable 2 percentage points from SKU prioritization actions. Gross margin, which has been a major focus for improvement, expanded 260 basis points to 38.8%, and operating margin expanded 130 basis points to 12.3% for the full year. Fourth quarter EPS grew 15%, leading to a full-year EPS of $2.58, an increase of 25% compared to the prior year. Importantly, we delivered very strong cash flow conversion of 115% for the full year. 2023 top-line growth was broad-based across nearly every category. We realized meaningful growth in skincare, nutrition, and women's health, which were partially fueled by the HRA and Gateway acquisitions. Healthy Lifestyle also contributed strong growth, driven by the US smoking cessation products. Category performance in the fourth quarter, however, was mixed, driven by growth in Healthy Lifestyle and Digestive Health, in addition to low single-digit growth in cough-cold products. Cough-cold sales in the US grew mid-single digits, driven in part by share gains and restocking of liquid cough-cold products, which were constrained in the prior year. These benefits were offset by infant formula, SKU prioritization actions, and lower cough-cold sales in Europe due to lower incidence levels. Importantly, store brand dollar share of US OTC increased 70 basis points during the last 13 weeks, according to IRI, as consumers continue to embrace value offerings. In quarter four, our selling to US retailers was higher than consumption, leading to a slightly elevated retail inventory level as we entered 2024. The margin improvement I just mentioned included benefits from our ongoing accretive initiatives. In 2023, the team delivered $30 million in expense synergies from the HRA acquisition, which were offset by one-time costs related to the transition of third-party HRA distributors to the internal Perrigo network. Now that this transition is complete, we will realize the full benefit in 2024. We also advanced our Supply Chain Reinvention Program, delivering $40 million of net savings during the year, while SKU prioritization actions in CSCA delivered a 30 basis points gross margin benefit to total Perrigo. We have now delivered more than one-third of the expected $100 million to $120 million in annualized savings by 2025 from this program, excluding targeted benefits from infant formula. For 2024, we have identified clear actions to achieve our operational and cash flow priorities, including delivering on the remaining HRA cost synergies, executing on our Supply Chain Reinvention Program, and successfully driving our growth plans. In addition, we must also augment and strengthen our infant formula business, accelerate our journey to One Perrigo by evolving our organization, our portfolio, our processes through the launch of Project Energize, which I will cover in a few minutes. We also need to enhance our brand-building capabilities and successfully launch Opill. Looking at these in more detail. During 2023, our team have been working to adapt to the evolving US infant formula regulatory landscape, which triggered a major overhaul of long-standing industry standards. In response to these changes, we made considerable investments in our infant formula manufacturing sites, including enhanced cleaning and sanitation protocols, enhancements to our environmental monitoring programs, and added additional quality assurance personnel. These changes resulted in lower manufacturing output and production yields across our network. Then, in late November of last year, the FDA issued a Form 483 to our Wisconsin facility, which we acquired in November 2022. This followed the receipt of a warning letter issued to this facility earlier in the year. Now, it was clear to me, as a new CEO with over 20 years of experience in regulated industries such as healthcare and having led other good manufacturing process plant remediations, that we need to put ourselves on an accelerated plan to augment and strengthen this business by investing and making facility enhancements and revising our quality protocols to ensure quality assured manufacturing in line with these new regulatory expectations. As a result, we bolstered our internal resources and brought in additional outside expertise to help revise, enhance, strengthen, and accelerate comprehensive standards and processes across our infant formula network, which we believe will position us well for the future. I personally chair the steering committee that oversees these efforts. As part of this plan, our manufacturing facilities have either undergone or are undergoing a site-specific evaluation, which may entail a pausing of production for comprehensive cleaning, infrastructure improvement, and further enhancement to quality protocols and manufacturing processes. Our Wisconsin facility has recently completed a plant-wide reset and is now back in production. Our other two infant formula facilities are under evaluation or set to begin a reset in the coming weeks. Cash costs to achieve this critical remediation plan are estimated at $35 million to $45 million. Due to unabsorbed overhead and depressed sales volumes resulting from these resets, infant formula operating income in 2024 is now expected to be below 2023 levels, where previously we expected a recovery. Context normalized full-year operating income generated from our infant formula business should be about $140 million or more. 2023, it was approximately half of this. To dig a bit deeper, we expect quarter one 2024 infant formula operating income to be approximately $50 million lower than prior year, building back to flat versus the prior year in the second quarter. As our facilities ramp up production and work to replenish inventories, we anticipate this business stabilizing and returning to growth in the second half of the year. Adapting to regulatory change and maintaining compliance is core to Perrigo's business and culture. Our infant formula products provide superior value to consumers and customers and play an important role during the first years of life. I'm confident that with this augmented and accelerated efforts, we will stabilize and strengthen this business, which is the right thing to do for our consumers, our customers, and our investors. Now turning to Project Energize. As we embark on the next stage of our self-care journey and evolve to One Perrigo, we are focused on creating a sustainable value-accretive growth strategy through a blended branded business, which I'll expand on in a few moments. To support this strategy, we have accelerated the launch of a three-year global investment and efficiency program, which we have called Project Energize, to drive the next evolution of capabilities and increase organizational agility. Efficiencies generated by Project Energize will enable us to drive global capabilities, including brand building and consumer-led innovation, unify our platforms and technologies, and support global business service models. Energize will also increase our organizational agility and maintain a competitive cost structure by centralizing and scaling our operating model in CSCI and streamlining commercial operations in CSCA. Benefits from Project Energize will also help us mitigate the near-term impact from actions we are taking to augment and strengthen the infant formula business. We expect approximately 60% of the efficiencies from Energize to be achieved through non-headcount-related actions, as we streamline and focus the organization. These efficiencies will be driven by several initiatives, including optimizing global advertising and promotional spend, eliminating planned investments that are not aligned with our One Perrigo Vision and procurement savings. The remaining 40% of the targeted efficiencies will be generated by centralizing CSCI and streamlining CSCA, resulting in a net role reduction of approximately 6%, thereby generating meaningful operating savings. This reduction includes the elimination of current and open roles, as well as the creation of new roles as we invest in brand-building and innovation capabilities. Energize is expected to deliver annual pre-tax savings of $140 million to $170 million by the end of 2026, of which, approximately $40 million to $60 million will be reinvested to build the necessary capabilities and processes I discussed earlier. The estimated cash cost to achieve Energize is $140 million to $160 million, including $20 million to $40 million in investments to enhance our capabilities in digital tools and systems. These costs and investments are anticipated to be incurred by the end of 2026. While the decision to reduce the number of roles at Perrigo was not an easy one, it will enable organizational dexterity across our segments by enhancing decision-making and simplifying commercial operations. Now turning to Opill. As we progress our work to enhance brand-building capabilities, we're excited about the upcoming launch of Opill. This is by far the most revolutionary and holistic product launch in the history of Perrigo and will be a benchmark for future branded launches. The Opill program encompasses a 360-degree approach to establish OTC, oral contraception awareness. Omni-channel activation plans are in place to drive awareness in-store, online, and at pharmacy, building a reassurance bridge to guide consumers through their decision journey. We expect Opill to be available to consumers in-store and online within a few weeks. In addition, we view Opill as a key pillar to our growing women's healthcare business. Perrigo intends to be a global leader in women's health and believes we have the core portfolio and personnel to implement this strategy. Translating these tangible operational priorities into our 2024 EPS outlook. First, we have several favorable trends, including momentum in our international and US OTC businesses, benefits from Project Energize, contributions from our Supply Chain Reinvention Program, and synergies from the HRA acquisition. These drivers are expected to be partially offset by the absence of tax benefits in the prior year and the operating income impact from expected exited businesses and products. Putting this together, we expect 2024 EPS to grow in the mid-teens percentage versus 2023, excluding infant formula. Taking infant formula into account, 2024 EPS is expected to be relatively flat to 2023. For context, earnings from our infant formula business are expected to be impacted by approximately $0.65 from our expectations at our last earnings call in November. While we are taking a conservative approach to our infant formula expectations in 2024, we have a clear action plan to recapture those lost earnings as we head into 2025. Now, I would like to share the progress we are making on our blueprint for One Perrigo, including our new vision and purpose, which will serve as our north star. We have made significant progress on our long-term enablers of our strategic principles, specifically, work to identify our winning portfolio is swiftly moving ahead. We currently compete in nine categories across multiple continents in more than 20 countries. To win in self-care, I believe we require a more focused approach to market, one that is simplified and scalable. We are also centralizing our capital allocation decisions. This approach will be standardized for all of the investments from capital expenditures, to advertising and innovation to shareholder returns. Governance will be owned by a newly established capital allocation office which will report to me. And with the upcoming launch of Opill we are taking a sizable step in our brand-building capabilities. Launches such as this will help build a blended branded model, which we introduced at our last earnings call. I want to spend a moment on a good UK example of a blended branded business. Our business model is a portfolio of consumer-preferred, branded, better-value, and store-brand solutions. This model is well established in many consumer categories, but has yet to be broadly adapted to the OTC arm. Perrigo is uniquely positioned to bring this model to market. And importantly, we already have a proven framework within our portfolio today. Our UK business provides unique value to customers as it is vertically inclusive, allowing Perrigo to partner and drive strategies aligned to specific retailer objectives. It also provides value to consumers as it is price-inclusive and allows Perrigo to provide high-quality self-care products across all consumer price points and, of course, to Perrigo, as the top-line growth and margin structure are both highly accretive to our overall business. And of course, to our shareholders, this will drive long-term sustainable value accretive growth. This model will be powered by the breadth and scale of our world-class manufacturing and quality-assured supply chain and the innovation capabilities that we have across those categories where we choose to play. So, the key takeaways. While we have achieved EPS outlook in 2023, we need to improve the quality of our business performance by augmenting, accelerating, and strengthening infant formula, achieving Project Energize targets, and launching Opill with excellence. In addition to these priorities, we'll continue to consumerize, simplify, and scale our business, all while focusing on cash and returns. With that, I will now turn the call over to Eduardo, our CFO to cover the financials.

Thank you, Patrick. Good morning, and good afternoon, everyone. Looking at our fiscal 2023 financials, starting with the GAAP to non-GAAP summary. Company reported a GAAP net loss of $4 million or a loss of $0.03 per diluted share. Adjusted net income was $352 million and adjusted diluted earnings per share was $2.58 versus $2.07 in the prior year. Primary adjustments to our 2023 pre-tax non-GAAP P&L were: first, amortization expenses of $272 million; second, a $90 million goodwill impairment charge related to the HRA rare disease reporting units in the CSCI segment; and third, restructuring charges of $40 million primarily related to our Supply Chain Reinvention Program. Full details can be found in the non-GAAP reconciliation table attached to this morning's press release. From this point forward, all financial results discussed will be on an adjusted basis unless otherwise noted. Turning to our fourth quarter and full year P&L on Slide 20. I'll cover sales, margins, and EPS on the next few slides, but first, I want to briefly touch on the 2023 tax rate. The effective tax rate for 2023 was 12.7% compared to 18.5% in the prior year. This 580 basis points decline was primarily due to the favorable impact of $12 million associated with the release of reserves related to the prior year audit settlements, which are not expected to repeat. Now to net sales for the fourth quarter and full year. Organic net sales for the fourth quarter declined 0.6%, which included base business growth of 1.7%, driven by performance in Healthy Lifestyle and Digestive Health categories. This growth was more than offset by 2.3 percentage points from SKU prioritization actions in CSCA. Reported net sales were flat as the positive impacts from currency translation and acquisitions were offset by exited products. Full-year organic net sales increased 1.7%, including base business growth of 3.5%, again, driven by performance in Health Lifestyle and Digestive Health categories. This growth was partially offset by SKU prioritization actions in CSCA of 1.8 percentage points. Reported net sales for the year grew 4.6%, including the HRA and Gateway acquisitions, which were partially offset by exited products. Turning to margins. The team has consistently delivered margin expansion since 2022. In fact, this quarter marks the sixth consecutive quarter of year-over-year gross and operating margin expansion, which was achieved through: first, strategic pricing actions; second, higher-margin acquisitions; and third, benefits from our Supply Chain Reinvention Program. Fiscal 2023 gross margin expanded to 160 basis points to 38.8%, driven by the factors I just mentioned, including a 30 basis points benefit from SKU prioritization actions. Operating margin for the year expanded 130 basis points to 12.3% as gross margin expansion was partially offset by higher operating expenses, including advertising and promotion investments and the addition of the Gateway business. Fourth quarter adjusted earnings per share was $0.86, an increase of 14.7% year-over-year. This increase was driven by business growth, benefits from our Supply Chain Reinvention Program and HRA synergies. These benefits were partially offset by infant formula, SKU prioritization actions, and exited product lines. Full-year adjusted earnings per share of $2.58 increased almost 25%, driven by business growth, including benefits from Supply Chain Reinvention Program, acquisitions, and no repeating tax benefits. These were partially offset by higher interest expense, SKU prioritization actions, exited product lines, and the legacy infant formula business. Looking back on our prior year earnings call in November of last year, we provided color on our initial outlook for 2024, based primarily on the recovery in infant formula during the second half of 2024. Given what you heard from Patrick today, the actions we are taking to augment and strengthen infant formula will have a dilutive effect to this initial outlook as we now expect full infant formula recovery for fiscal year 2025. Also, given the cash required to implement Project Energize and infant formula investments, we will pay down $400 million in bonds due at the end of the year versus our initial thoughts to pay these bonds early, which has a negative earnings per share impact of $0.05 to our initial outlook. Also not contemplated in the November initial outlook was the operating income reduction from expected portfolio refinement and exited products. Holding this together, we expect 2024 earnings per share to grow in the mid-teens as a percent, excluding infant formula. Taking infant formula into account, 2024 earnings per share is expected to be flat compared to 2023. Turning now to cash. Exiting 2023, we had $751 million of cash on the balance sheet, an increase of $150 million from the end of 2022. This increase includes 2023 operating cash flow generation of $406 million, a 115% conversion to adjusted net income. Looking at our cash sources for 2024, we expect operating cash flow conversion between 90% and 100%. This conversion includes costs and investments related to Project Energize, our Supply Chain Reinvention Program, and augmenting and strengthening infant formula, all totaling approximately $200 million. We also continue to expect portfolio refinement to be a source of cash in 2024. As for cash uses during the year, we expect to pay down the $400 million in debt, make capital investments and provide returns to shareholders through dividends. Last night, we issued a press release that the Perrigo Board approved a 2024 dividend increase of 1% versus 2023, making this the 21st year in a row Perrigo has increased its annual dividend. Regarding capital investments, over the past three years, we have invested nearly $90 million in our infant formula network. On top of that, we are increasing capital investments in this business to consistently deliver on regulatory expectations, and we are confirming our commitment to expand capacity at our Wisconsin facility by investing an additional $60 million. Importantly, we reduced net leverage by a whole turn over the past year to 4.5 times, and expect to end 2024 with a net leverage ratio of between 3.8 times and 4 times. Now to our 2024 outlook. Starting with organic net sales, which expect to grow in the range of 1% to 3% over the prior year. New products, including Opill, margin recovery pricing actions, and the absence of the HRA distributor transitions are expected to more than offset volume declines, primarily in infant formula, and a negative impact of 1 percentage point to organic growth from SKU prioritization actions to enhance margins. All in, net sales growth is expected to be flat compared to 2023 as organic growth is offset by exited products and businesses. Excluding infant formula from both years, we expect the gross margin to continue to grow strongly in 2024, due in part to benefits from our Supply Chain Reinvention Program. Including infant formula, gross margin is expected to be flat compared to the prior year. Despite this temporary impact, operating margin is anticipated to expand due to the actions being taken under Project Energize and further cost synergies related to the HRA acquisition. We also assume business exits with a corresponding reduction in earnings. Full-year adjusted effective tax rate is expected to normalize to approximately 20.5%, and interest expenses will be slightly higher for the year at approximately $180 million. Full-year earnings per share is expected to be in the range of $2.50 to $2.65, leading to mid-teens percentage growth excluding infant formula. And operating cash flow conversion is expected to remain healthy at 90% to 100% as a percentage of adjusted net income. Now to phasing throughout the year. Q1 2024 net sales are expected to decline a high single-digit percentage compared to the prior year due to infant formula, lower sales in the US OTC as customer inventories normalize, and the negative impact from SKU prioritization actions in CSCA. The launch of Opill and continued momentum in our CSCI business are expected to partially offset these headwinds in Q1. Driven primarily by an estimated negative $0.30 earnings per share impact from infant formula, Q1 earnings per share is expected to decline by nearly half compared to the prior year. Looking to the balance of 2024, as our infant formula facilities begin to stabilize, we anticipate this business to be flat compared to the prior year in the second quarter and returning to year-over-year growth in the third and fourth quarters. This leads to approximately two-thirds of total Perrigo earnings per share being generated during the second half of the year. In closing, we're making considerable advancements on our journey to become One Perrigo and execute on our strategy. We have initiated Project Energize, which will make us more efficient and agile while providing a bridge to 2025. We expect our infant formula business to be augmented and strengthened for the full year and beyond. I would also like to thank our Perrigo colleagues for their tremendous efforts in delivering our 2023 results and for the dedication and commitment to delivering on our One Perrigo vision. Now, I will turn the call back to Brad.

Thanks, Eduardo. Let me now turn the call back to Patrick for a few last remarks.

Thank you, Brad. The first thing I want to start with is, of course, infant formula. After five months in roll in late November of 2023, it became abundantly clear to me that we had to make an intervention in our infant formula manufacturing, GMP, and quality assurance for the good of the company. We need to take the actions that we've outlined today. We need to get on a different course. The path we were on was costing us a lot, approximately between $80 million to $100 million OI drag over 12 months through a combination of lost production, scrap, and higher operating costs. We had to address that. More importantly, we were not getting to where we needed to be from a compliance standpoint. This was evidenced by another FDA 483 in late November at Wisconsin. Now we have significantly increased and accelerated our investments to change the compliance performance of our three sites. It's absolutely the right thing to do in this supply-constrained environment. Wisconsin has been through this reset successfully, and we're on a path to come out of this disruptiveness there. We now need to replicate that at our other two sites and are in the process of doing that. You heard today that we are facing costs of about $200 million. I wanted to expand on that from a cash cost standpoint to reassure you they truly are one-time in nature. In infant formula, we're spending $40 million to remediate and eliminate the disruption we're currently seeing in infant formula. On Project Energize, we have about $80 million of one-time people severance costs. And then in our supply chain reassurance, we have out-of-pocket expenses of about $20 million as we execute our supply-side reinvention. They are the three largest cash cost elements of that $200 million investment. We have to execute now with excellence. The two biggest drivers of our performance and upside to 2024 is, of course, infant formula, remediation, acceleration, and Project Energize. And this is where I'm spending the vast majority of my time. We are working on portfolio refinement and our long-term growth story. And as you heard me say, that is moving well, and we will come back with a full Investor Day oversight of that in the fall. So in summary, our business is performing well and is in line with expectations, except infant formula, which needs to be remediated with excellence and urgency in light of the March 2023 FDA revised regulatory guidelines. Just to expand on that a little bit, excluding infant formula, the balance of our business on 2024 is expected to grow between 3% and 5%, which is in line with to slightly ahead of expectations. Gross margin in 2024 is expected to expand to 40%, in line to ahead of expectations. And earnings per share, excluding infant formula, is growing mid-teens, which is, again, in line to ahead of expectations. Our number one priority is to build back positive earnings per share impact in 2024 from infant formula. And that is what we're extremely focused on. Thank you, Brad.

Great. Operator, can we please open the call for questions?

Certainly. Ladies and gentlemen, we will now conduct a question-and-answer. Your first question comes from the line of Susan Anderson from Canaccord. Your line is now open.

Hi. Good morning. Thanks for all the details this morning on the infant formula business. I guess maybe just to clarify on the top line. So it sounds like you expect first quarter top line for infant to be the worst. And I think you're cycling the recall from last year too. I guess should we expect it to incrementally get better from a top line perspective as we go throughout the year? And then also maybe if you can give some thoughts on just what you expect the annual run rate of the business to be longer term?

Thank you, Susan. You’re correct. We anticipate that the first and second quarters for nutrition will fall short of last year's numbers. Last year, we faced a recall in the first quarter and also benefited significantly from the acquisition of the Wisconsin facility. Additionally, the second quarter saw strong performance. As we look towards the second half of the year, we began to encounter major impacts from adjusting to new regulatory guidelines and other factors we've discussed. This year, however, we expect the opposite. The first quarter will have a strong impact, as Patrick noted regarding the Wisconsin facility, which has undergone a significant site-wide reset, affecting both volume and pricing. This effect will carry over into the second quarter, which we expect to be flat compared to last year, with the bulk of recovery anticipated in the third and fourth quarters.

Okay, great. And then just on operating profit, so I guess you guys expect to get back to historical profit levels, prior to the FDA regulations? Or is it going to be a lower profit business going forward now?

Well, so remember, as we mentioned, we're talking about on a run rate business, this should give us about $140 million away. That's really our ambition and aspiration to get back to those levels. And remember, originally when we talk in November, when we talk about the recovery of those $0.35, we were expecting to get back to close to those levels, and we do not expect that to happen in 2024, but we should expect that to return into normalcy next year. And we are assessed the phasing of that during the year as some of these developments unfold.

Okay, great. That sounds good. If I could add one more question about Opill, could you discuss the rollout to stores and online? Specifically, which stores will it be available in? Is it a nationwide rollout? What online platforms will it be on? Also, how do you anticipate the revenue growth as the year progresses?

Yes, hi Susan. It's Patrick. It's great to hear from you. We're just a couple of weeks away from launching, and you'll see it in every store and online. We have a strong distribution plan with a solid retail launch and effective online and digital strategies, along with robust communication efforts. The Opill launch has significantly improved commercially over the past six or seven months as we've added new brand-building capabilities and agency partners. I'm optimistic that you'll witness a top-tier consumer packaged goods launch. Regarding the revenue ramp, we'll start with an initial pipeline and then move into consumer off-take. About half of the expected volume will come from those recovering the product through prescriptions. We anticipate an initial surge, followed by a slight dip in the off-take curve as we move into the third and fourth quarters, since we've picked up most of the full switch volume earlier on. We'll be assessing the effectiveness of this program on a weekly basis, allowing us to optimize our advertising and promotion spending. We're excited about this and it looks very promising.

Great. That sounds exciting. Thanks so much. Good luck for the rest of the year.

Thank you.

Thank you.

Thank you for the questions. Patrick, regarding Nutritionals, how confident are you that these issues will be resolved for Perrigo once you finish this remediation effort? It has been a challenging year, and I would like to gauge your overall sense of assurance that this is the final phase we will experience with Nutritionals.

Yes. Hi, Chris. Thanks. And I understand and have thought about the question. I've been here before in regulated industries, including in food, where the manufacturing process was remarkably similar to this. We were also facing some regulatory hurdles in that particular business. And I worked with some outstanding GMP remediation experts. At the end of November, when it became apparent to me that we needed to make a more significant definitive intervention, I reached out to the same partners and actually the same person. That person did two site remediations with me in a different company, which were highly effective and really step change the reliability and the compliance of those parts at that moment in time. As I've looked at what we've done at Wisconsin, it's a very significant intervention with a different level of protocol, corrective actions, preventative actions, quality assurance application, and environmental monitoring and cleaning and sanitization. What I'd say is, so far so good that site is up. It's a different level of adherence from the team on the ground there who've been through extensive training. And I am confident that that farm is absolutely on the right track. Okay? I need more time. Alright? Because this is a recent restart, but I'm confident and we will continue to learn our way there, working in combination with the FDA who we update monthly on our progress. I certainly think this is our best shot, and it is a different level of GMP and quality assurance to what we were historically on the path towards. So I'm as confident as I can be at this stage. I just need a bit more evidence.

Okay. I appreciate the color there. And then just in terms of the competitive landscape here, just how do you think about share loss? And once you've completed these efforts, kind of the willingness of your customer base to kind of re-engage with Perrigo?

Yes. I mean, we're dealing in the most sensitive of categories. Alright? This we have a moral and business obligation. Obviously, this is a safe and effective product. We're talking about infant formulas. Everybody shares that. Everybody wants that. And finished product testing alone cannot be sufficient to confirm product safety. There has to be a final indication of a quality-controlled manufacturing environment. With this investment, there is no doubt that that moves us to that. It's what all parties want. And we are working with our retailers to explain what we're doing, try to minimize that disruption and retain our partnerships obviously with them. This is not a standard just at Perrigo. This is a standard for any provider internationally or nationally. I know what we've had to do. I think we were operating at normal industry standards. I think what we're doing is probably ahead of what is being done by many other manufacturers. So I hope at the end of the day, our customers will allow us to do this and will then come back to a high-value quality assured manufacturer of infant formula.

And just one final question for me. Just can you comment on the broader kind of Perrigo 2025 targets? It seems like the business ex-infant nutritional is really on track and we've got some good momentum there. And it sounds like directionally you're hoping that this is something that you can recapture some of these earnings. So I'm just trying to get some perspective on like should we still be thinking about those 2025 targets or is that something we should maybe hold off until the Analyst Day later this year? Thank you.

Yes. Thank you for the question. Chris, as you heard from Patrick and I, we really must execute these actions on infant formula and Project Energize. Those are our critical priorities. And in parallel, we are revisiting our portfolio to make sure it's going to be sustainable in the long term, right. So as we shared before, we're expecting to have a much clearer view on our growth perspectives in the fall when we expect to do an Investor Day. And so, we expect to share more by that time.

Appreciate all the color today. Thank you.

Thanks, Chris.

Hey, good morning team and thanks for taking the questions. On Opill, can you just discuss how much selling benefit there may be here in Q1 as you're selling the product into the retailers before it hits the shelves? And then can you just touch a little bit on the kind of like supply chain processes you have in place to ensure minimal disruption of getting product to consumers once it is launched?

Yes. So thank you for the question. So again, Q1, we're just about to do the first launch now in the coming weeks, so that's mid to the end of March. And so, we expect from a margin standpoint, gross margin is going to have a benefit. But remember, the first year there will be a dilutive effect because we're really investing in the brand and we're going to see significant investments mainly at the retailer and online in the second quarter. So we'd expect a minimum accretion at the bottom line in Q1, but an improvement in gross profit margin. Unfortunately, that is significantly offset by the infant formula impact that we just talked about. On the supply side, second part of the question, actually very good. We've ramped up extremely well. We've shipped. The product is here, waiting to be distributed. All batches for year one consumption have been produced, which is good. And we have buffer for upside as well. This is a very well tested supply chain.

Very helpful. Thank you. And then can you touch on some of the SKU rationalization efforts you're undergoing? Is that mainly in the past right now? Or is that something you're going to continue to do going forward, both this year and over the longer term?

Yes. So we expect that to have an impact in 2024 and that should be it, right? Because remember, last year we talked about 1,000 SKUs that we were rationalizing, and so we expect another 1,000 this year, and we should be done by that. The majority of the other benefits coming from the supply chain reinvention are mainly on the planning process and how we work in our facilities through our Perrigo work systems, but that should be it.

Yes. And Karen, this is Brad. So for the impact on the top line to take what Eduardo has said, it's about a 1 point impact to organic growth to 2024.

Thank you. So are the headwinds to the CSCA oral care still the SKU rationalization efforts and then the promotions?

Yes. That's mainly it. But important to say, we're seeing the business on a positive trajectory, right. So remember, we had significant impact in 2022 mainly because of the disruptions after COVID and additional logistic costs. All those things have been significantly addressed during 2023. And also importantly from a cash standpoint, the team did an amazing job and had contributing almost $50 million on reduction in inventories at the end of 2023. So I would say the health of the business has improved significantly. We need to continue to work there to make sure that our portfolio is in line with our customers' wants and we even on that side on the branded, we had exited some brands that didn't make sense for the long term.

Thanks. And if I can squeeze one more in. On CSCI, the cost of goods inflation, are there pricing actions being taken? Or are we sort of nearing the end of this inflationary impact?

That's a great question and a valid point. We're observing very positive pricing actions being implemented. This is likely due to ongoing inflation, particularly since we experienced significant deceleration in CSCA during 2023. However, in CSCI, this process is taking longer. We're benefiting from this situation and experiencing strong momentum continuing from Q4 into Q1 in our international business, primarily driven by price increases.

Thank you.

There are no further questions at this time. I will now hand the call back to Brad Joseph. Please continue.

Thanks, Sean. Thanks everybody for your interest in Perrigo. Looking forward to catching up soon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.