Embecta Corp (EMBC) 2023 Q4 法說會逐字稿

Please standby. Welcome, ladies and gentlemen, to the fiscal fourth quarter and full-year 2023 Embecta earnings conference call. At this time, all participants have been placed to listen-only mode. Please note that this conference call is being recorded and a recording will be available on the company's website for replay following the completion of this call.

請等待。女士們、先生們，歡迎參加 Emecta 第四季和 2023 年全年財報電話會議。此時，所有參與者均已設定為僅監聽模式。請注意，本次電話會議正在錄音，錄音將在公司網站上提供，以便在本次電話會議結束後重播。

I would like to hand the conference call over to your host today, Mr. Pravesh Khandelwal, Vice President, Investor Relations. Please go ahead.

我想將今天的電話會議交給主持人投資者關係副總裁 Pravesh Khandelwal 先生。請繼續。

Thank you, operator. Good morning, everyone, and welcome to Embecta's fiscal fourth quarter and full-year 2023 earnings conference call. The press release and slides to accompany today's call and webcast replay details are available on the Investor Relations section of the company's website at www.embecta.com. With me today are Dev Kurdikar, Embecta's President and Chief Executive Officer; and Jake Elguicze, our Chief Financial Officer.

謝謝你，接線生。大家早安，歡迎參加 Embecta 的第四財季和 2023 年全年財報電話會議。今天電話會議的新聞稿和幻燈片以及網路廣播重播的詳細資訊可在公司網站 www.embecta.com 的投資者關係部分取得。今天和我在一起的有 Embecta 總裁兼執行長 Dev Kurdikar；和我們的財務長 Jake Elguicze。

Before we begin, I would like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in our slides. We wish to caution you that such statements are, in fact, forward looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include but are not limited to, factors referenced in our press release today, as well as our filings with the SEC, which can be accessed on our website.

在我們開始之前，我想提醒您，電話會議中討論的一些事項將包含有關我們幻燈片中概述的未來事件的前瞻性陳述。我們希望提醒您，此類陳述實際上具有前瞻性，並存在風險和不確定性，實際事件或結果可能存在重大差異。可能導致實際結果或事件出現重大差異的因素包括但不限於我們今天的新聞稿中提到的因素，以及我們向 SEC 提交的文件（可以在我們的網站上存取）。

In addition, we will discuss certain non-GAAP financial measures on this call, which should be considered a supplement to and not a substitute for financial measures prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in our press release and conference call presentation.

此外，我們將在本次電話會議上討論某些非公認會計原則財務措施，這些措施應被視為根據公認會計原則準備的財務措施的補充，而不是替代。我們的新聞稿和電話會議簡報中包含了這些非公認會計準則衡量標準與可比較公認會計準則衡量標準的調整。

Our agenda for today's call is as follows: Dev will begin by providing some remarks on the overall performance of our business during the fourth quarter and full fiscal year of 2023, as well as an overview of our strategic priorities for 2024. Jake will then provide a more in-depth review of our Q4 and full-year 2023 financial results, as well as our financial guidance for fiscal-year 2024 which we introduced in today's press release. Finally, Dev will provide some thoughts on the GLP-1 market landscape, and we will close the call with a question-and-answer session.

我們今天的電話會議議程如下：Dev 將首先對 2023 年第四季度和整個財年我們業務的整體業績發表一些評論，並概述我們 2024 年的戰略重點。然後 Jake 將提供對我們第四季度和2023年全年財務表現以及我們在今天的新聞稿中介紹的2024 財年財務指引進行了更深入的審查。最後，Dev 將提供一些關於 GLP-1 市場格局的想法，我們將以問答環節結束電話會議。

With that said, I would now like to turn the call over to our CEO, Dev Kurdikar. Dev?

話雖如此，我現在想將電話轉給我們的執行長 Dev Kurdikar。開發？

Good morning, everyone, and thank you for taking the time to join us. The completion of fiscal 2023 marks our first full fiscal year as a stand-alone company, a company that is dedicated to developing and providing solutions that make life better for people living with diabetes. And I could not be prouder of our teams around the world.

大家早安，感謝您抽出寶貴時間加入我們。 2023 財年的結束標誌著我們作為獨立公司的第一個完整財年，該公司致力於開發和提供改善糖尿病患者生活的解決方案。我為我們世界各地的團隊感到無比自豪。

Turning to some fiscal 2023 highlights. It is my pleasure to share that our fiscal-year 2023 results exceeded our expectations as our team's commitment, resilience, and strategic focus played a pivotal role in our success. And the team's efforts did not go unnoticed as Embecta was recognized as the winner of the MD+DI Reader's Choice company the year for 2022, which is one of several external recognitions our team received.

轉向 2023 財年的一些亮點。我很高興與大家分享，我們 2023 財年的表現超出了我們的預期，因為我們團隊的承諾、韌性和策略重點在我們的成功中發揮了關鍵作用。團隊的努力並沒有被忽視，Embecta 被公認為 2022 年 MD+DI 讀者選擇公司的獲勝者，這是我們團隊獲得的多項外部認可之一。

So basically, our associates have continued to make significant advancements in the process of establishing Embecta as an independent company, with the goal of exiting as many transitions service agreement to BD as possible by March 31, 2024. Along those lines, we've made substantial progress by implementing our own global HR information system, launching the new customer relationship management system, and establishing our global IT network.

因此，基本上，我們的員工在將Embecta 建立為一家獨立公司的過程中繼續取得重大進展，目標是在2024 年3 月31 日之前退出盡可能多的向BD 提供的過渡服務協議。沿著這些思路，我們制定了透過實施我們自己的全球人力資源資訊系統、推出新的客戶關係管理系統以及建立我們的全球IT網絡，取得了實質進展。

Throughout these activities, we have been diligent in minimizing any potential disruptions to our customers and people with diabetes who rely on our products daily. As you had mentioned on prior call, we have initiated the demerger process for a Suzhou, China manufacturing entity so that we could transfer their entity from BD to investor.

在這些活動中，我們一直努力最大程度地減少對每天依賴我們產品的客戶和糖尿病患者的任何潛在幹擾。正如您在先前的電話中提到的，我們已經啟動了中國蘇州一家製造實體的分拆流程，以便我們可以將其實體從 BD 轉讓給投資者。

This is a multi-step process, and I'm pleased to inform you that during the past few months, we have achieved several important milestones. These include obtaining business and product licenses, implementing our ERP solution, and transferring ownership of land and buildings. We have also resumed production at that period for markets outside of China. And we are currently in the final stages of obtaining our manufacturing license, which will enable us to produce domestic products for China.

這是一個多步驟的過程，我很高興地通知您，在過去的幾個月裡，我們已經實現了幾個重要的里程碑。其中包括獲得業務和產品許可證、實施我們的 ERP 解決方案以及轉讓土地和建築物的所有權。同期我們也恢復了針對中國以外市場的生產。我們目前正處於獲得製造許可證的最後階段，這將使我們能夠為中國生產國內產品。

We also initiated the deployment of our ERP solution along with the operationalization of our distribution network and shared service infrastructure for the US, including or holders manufacturing plant in Canada. This implementation began earlier this month, and we are pleased with the progress we've made so far.

我們還啟動了 ERP 解決方案的部署，以及美國分銷網路和共享服務基礎設施的運營，包括加拿大的製造工廠。這項實施已於本月初開始，我們對迄今為止所取得的進展感到滿意。

As mentioned in the past, to minimize the potential for disruption, we are taking the approach of implementing our ERP system in phases. With the ERP implementations in Suzhou, China, the US, and Canada, we have now implemented our systems in two of our three manufacturing plants in markets representing approximately 60% of our revenue.

正如過去所提到的，為了最大限度地減少中斷的可能性，我們正在採取分階段實施 ERP 系統的方法。隨著在中國蘇州、美國和加拿大實施 ERP，我們現在已在占我們收入約 60% 的市場的三個製造工廠中的兩個實施了我們的系統。

Turning from separation activities that occurred during 2023 to actions taken to strengthen and optimize our call, we continue to demonstrate a strong commitment to ensuring broad and preferred access to our products for patients. To this end, effective January 2024, three of the top Medicare part D plans which are a critical and growing segment of the payer market, providing pharmacy benefits for seniors who comprise a disproportionately high percentage of people with diabetes will advantage Embecta as an exclusive or dual-preferred brand on the formulary list.

從 2023 年發生的分離活動轉向為加強和優化我們的呼籲而採取的行動，我們繼續表現出堅定的承諾，確保患者廣泛且優先地獲得我們的產品。為此，自2024 年1 月起生效，三個頂級Medicare D 部分計劃（醫療保險D 部分計劃是付款人市場中一個重要且不斷增長的部分，為糖尿病患者比例過高的老年人提供藥品福利）將有利於Embecta 作為獨家或處方清單中的雙重首選品牌。

Previously, these Medicare plans were open access and broadly covered all brands of pen needle in syringes without advantaging anyone then. Additionally, we remain committed to new product development and remain excited about the progress we're making in terms of our insulin patch pump that is being developed specifically for the type-two market. We are working to achieve critical milestones in fiscal 2024 and plan on sharing more at the appropriate time.

此前，這些醫療保險計劃是開放的，廣泛涵蓋所有品牌的注射器筆針，當時沒有給任何人帶來好處。此外，我們仍然致力於新產品開發，並對我們在專為二型市場開發的胰島素貼片幫浦方面取得的進展感到興奮。我們正在努力在 2024 財年實現重要里程碑，並計劃在適當的時候分享更多資訊。

Lastly, we were proud to celebrate this year's diabetes awareness month by ringing the Nasdaq opening bell, along with representatives of several organizations that makes supporting the people who are living with diabetes their sole focus. Our company is honored to recognize the people with diabetes, caregivers, health care providers, and advocacy organizations working together to improve access to education and continue to progress towards the vision of life and limited by diabetes.

最後，我們很自豪地與幾個將支持糖尿病患者作為唯一關注點的組織的代表一起敲響納斯達克開盤鐘來慶祝今年的糖尿病意識月。我們公司很榮幸地表彰糖尿病患者、照護者、醫療保健提供者和倡導組織，他們共同努力改善受教育的機會，並繼續朝著不受糖尿病限制的生活願景邁進。

Now, let's review our fourth-quarter and full-year revenue performance in a bit more detail. During Q4, we generated revenue of $281.9 million, which represented an increase of 2.7% on an as-reported basis, and growth of 2.1% on a constant currency basis. When normalizing for the impact of year-over-year changes of the non-diabetes products that we contract manufacturing and sell to BD, our underlying core-injection business grew an impressive 4.9% on a constant currency basis.

現在，讓我們更詳細地回顧一下我們第四季和全年的營收表現。第四季度，我們營收 2.819 億美元，按報告計算成長 2.7%，以固定匯率計算成長 2.1%。當我們將合約生產並向 BD 銷售的非糖尿病產品的同比變化影響正常化時，我們的基礎核心注射業務按固定匯率計算增長了 4.9%，令人印象深刻。

The constant currency growth of our core-injection products was aided in part by an easy comparable as the fourth quarter of 2022 was negatively impacted by the timing of certain distributor orders, which positively impacted our revenue in the third quarter of 2022. When normalizing for both the year-over-year contract manufacturing revenue headwinds as well as the timing of certain distributor orders, our core product lines grew approximately 3.4%. These results exceeded our previously communicated expectations, primarily due to the performance of our pen needle products.

我們的核心注塑產品的貨幣持續成長在一定程度上得益於簡單的可比性，因為2022 年第四季受到某些經銷商訂單時間的負面影響，這對我們2022 年第三季的收入產生了正面影響。由於合約製造收入同比下降以及某些經銷商訂單的時間安排，我們的核心產品線成長了約 3.4%。這些結果超出了我們先前傳達的預期，這主要歸功於我們筆針產品的表現。

While from a geography perspective, Q4 revenue came in better than we previously expected in most countries, including the US, Canada and Latin America. Regarding the US, during the quarter, revenue totaled $151.8 million which represented year-over-year growth of approximately 1.3% on a constant currency basis. This was driven by higher pricing on certain core injection products, partially offset by lower year-over-year contract manufacturing revenue from the sale of certain non-diabetes products to BD, and unfavorable changes in volume, mainly related to our syringe business where end-user demand in the US market continues to decline.

從地理角度來看，大多數國家（包括美國、加拿大和拉丁美洲）第四季的營收都比我們先前的預期好。美國方面，本季營收總計 1.518 億美元，以固定匯率計算年增約 1.3%。這是由於某些核心注射產品的定價較高，部分被向 BD 銷售某些非糖尿病產品的合約製造收入同比下降以及銷量的不利變化（主要與我們的注射器業務相關）所抵消。- 美國市場用戶需求持續下降。

Excluding contract manufacturing revenue, our core-injection business grew by 6.6% in the US. However, this was aided by an easy comparable I mentioned earlier, associated with the timing of certain distributor orders, which positively impacted our revenue in the third quarter of 2022. When normalizing for both the year-over-year contract manufacturing revenue headwinds, as well as the timing of certain distributor orders, our core product lines within the US grew approximately 3.8%.

不計合約製造收入，我們在美國的核心注塑業務成長了 6.6%。然而，這得益於我之前提到的一個簡單的可比性，與某些分銷商訂單的時間相關，這對我們2022 年第三季度的收入產生了積極影響。在對同比合約製造收入逆風進行標準化時，以及某些經銷商訂單的時間安排，我們在美國的核心產品線成長了約 3.8%。

Turning to our performance outside of the US. During Q4, international revenue totaled $130.1 million, which equated to year-over-year constant currency growth of approximately 3.0%. Growth internationally was primarily due to a favorable comparison in China, as last year, their country was facing COVID restrictions, as well as year-over-year growth within Canada and Asia.

轉向我們在美國以外的表現。第四季度，國際營收總計 1.301 億美元，相當於以固定匯率計算年增約 3.0%。國際上的成長主要是由於中國的良好比較，因為去年，他們的國家面臨新冠疫情的限制，以及加拿大和亞洲的同比增長。

For the full year, Embecta generated revenues of approximately $1.121 billion which represented a decline of 0.8% on a reported basis, but an increase of 1.6% on a constant currency basis. When normalizing for the impact of year-over-year contract manufacturing headwinds, Embecta's the underlying core-injection business grew approximately 1.8% on a constant currency basis.

Embecta 全年營收約 11.21 億美元，按報告資料計算下降 0.8%，但以固定匯率計算成長 1.6%。當將同比合約製造逆風的影響正常化時，Embecta 的基礎核心注塑業務以固定匯率計算增長了約 1.8%。

From a regional perspective, US revenues totaled $601.4 million which grew by 0.2% on a constant currency basis, or 0.5% when normalizing for the impact of year-over-year changes of contract manufacturing. While international revenues totaled $519.4 million which equated to year-over-year constant currency growth of approximately 3.2%, driven primarily by performance with emerging markets as well as the benefit we saw from a competitive product supply shortage.

從地區角度來看，美國收入總計 6.014 億美元，按固定匯率計算增長 0.2%，如果合約製造同比變化的影響正常化，則增長 0.5%。國際收入總計 5.194 億美元，相當於以固定匯率計算同比增長約 3.2%，這主要是由新興市場的業績以及我們從競爭性產品供應短缺中看到的好處推動的。

Lastly, before I turn the call over to Jake, I'd like to share some strategic priorities for fiscal 2024. In 2024, we will continue to be focused on the same three core strategic priorities that we had in 2023. These priorities have served as the foundations for our actions and decision making driving our company forward.

最後，在我把電話轉給傑克之前，我想分享一下 2024 財年的一些策略重點。2024 年，我們將繼續關注 2023 年的三個核心策略重點。這些重點已經服務作為我們行動和決策的基礎，推動我們公司前進。

They are, first, strengthen and optimize the core base business. In a rapidly evolving market landscape, we will continue to be diligent in supporting our customers and people with diabetes. While the operating environment and inflation remains unpredictable, we will maintain our focus on managing through any challenges that may arise. And as Jake will go through when he provides a fiscal-2024 guidance, you will see that it is consistent with the expectations we have laid out pre-spin in March of 2022.

一是做強做優核心基礎業務。在快速發展的市場環境中，我們將繼續努力為我們的客戶和糖尿病患者提供支援。儘管經營環境和通膨仍然難以預測，但我們將繼續專注於應對可能出現的任何挑戰。正如傑克在提供 2024 財年指導時所闡述的那樣，您會發現它與我們在 2022 年 3 月預調整時制定的預期一致。

Separate and stand up as an independent committee. We've been on a transformative journey to become an independent entity. This process involves complex projects like the implementation of an ERP system, setting up our own distribution network, and exiting many of our transition services agreements with BD.

分開並成立一個獨立委員會。我們一直在努力成為一個獨立的實體。這個過程涉及複雜的項目，例如實施 ERP 系統、建立我們自己的分銷網絡以及退出與 BD 的許多過渡服務協議。

As I mentioned earlier, we have implemented our ERP solution and operationalize their distribution network and shared services infrastructure to support our business in US and Canada, and at two out of our three manufacturing plants. We have learned a great deal from these implementations and are now focused on accomplishing the same in the remaining markets and at our plant in Ireland.

正如我之前提到的，我們已經實施了 ERP 解決方案，並經營了他們的分銷網絡和共享服務基礎設施，以支援我們在美國和加拿大以及三分之二的製造工廠的業務。我們從這些實施中學到了很多東西，現在正致力於在其他市場和我們在愛爾蘭的工廠實現同樣的目標。

We have previously commented that our transition service agreements are generally set to expire on March 31, 2024. To allow for phasing of the remaining implementations of our ERP solution, distribution network, and shared services capabilities, we have requested for an extension of certain TSAs and related agreement from BD. BD recently agreed in principle to grant unlimited extension conditioned upon obtaining a supplemental private letter ruling from the IRS, which would allow us to extend certain TSAs for a limited set of markets until early fiscal 2025.

我們之前曾評論過，我們的過渡服務協議通常將於 2024 年 3 月 31 日到期。為了分階段實施我們的 ERP 解決方案、分銷網絡和共享服務功能，我們已請求延長某些 TSA以及BD 的相關協議。 BD 最近原則上同意給予無限延期，條件是獲得 IRS 的補充私訊裁決，這將允許我們將針對有限市場的某些 TSA 延期至 2025 財年初。

We have been expanding and we'll continue to expand significant effort across the company to mitigate the risk of potential disruption, as we have to exit TSA and replace them with our own systems and processes. While we have generally been successful so far, there could potentially be some temporary disruption of sales in certain countries as we work through obtaining all the appropriate product registrations and licenses among other requirements.

我們一直在擴張，並將繼續在整個公司範圍內加大力度，以降低潛在中斷的風險，因為我們必須退出 TSA，並用我們自己的系統和流程取而代之。雖然到目前為止我們總體上取得了成功，但在我們努力獲得所有適當的產品註冊和許可證以及其他要求時，某些國家/地區的銷售可能會暫時中斷。

Our third priority is invest for growth. Despite the competitive challenges in our industry, we remain committed to investing for growth. We understand that transitioning the company to growth over time by new product development or inorganic business development initiatives is an important goal for us, and we are keenly focused on sustainably improving the long-term constant currency revenue growth profile of Embecta.

我們的第三個優先事項是投資促進成長。儘管我們的行業面臨競爭挑戰，但我們仍然致力於投資以促進成長。我們知道，透過新產品開發或無機業務發展計劃，使公司隨著時間的推移實現成長是我們的一個重要目標，我們熱衷於可持續改善 Embecta 的長期恆定貨幣收入成長狀況。

With that, let me turn it over to Jay to go through our financial highlights. Jake?

接下來，讓我將其交給 Jay 來介紹一下我們的財務亮點。傑克？

Thank you, Dev, and good morning, everyone. Before I discuss the financial results, I would like to remind the investment community that Embecta was spun off from BD on April 1, 2022. Now, the financial results during the pre-spin periods were based on carve-out accounting principles and do not reflect what Embecta's financial results would have been had Embecta operated as a standalone public company. Therefore, the financial results for the 12-month periods ending September 30 of 2023 and September 30 of 2022, are not meaningfully comparable.

謝謝你，Dev，大家早安。在討論財務表現之前，我想提醒投資界，Embecta 於 2022 年 4 月 1 日從 BD 剝離。現在，分拆前期間的財務業績是基於剝離會計原則，並不反映瞭如果Embecta 作為一家獨立的上市公司營運的話，Embecta 的財務表現會如何。因此，截至2023年9月30日及截至2022年9月30日的12個月期間的財務表現並無有意義的可比性。

Given the discussion has already occurred regarding revenue, I will start my review of Embecta's financial performance for the fourth quarter at the gross profit line. GAAP gross profit in margin for the fourth quarter of fiscal 2023 totaled $181.8 million and 64.5%, respectively. This compared to $176.9 million and 64.4% in the prior year period.

鑑於有關收入的討論已經發生，我將從毛利線開始回顧 Embecta 第四季的財務表現。 2023 財年第四季的 GAAP 毛利總額分別為 1.818 億美元和 64.5%。相較之下，去年同期為 1.769 億美元，成長 64.4%。

The slight year-over-year increase in GAAP gross profit and margin was due to a combination of factors which essentially net each other out. This includes tailwinds from product and geographic mix, favorable year-over-year pricing, and cost-improvement programs. These items were offset by the impact of inflation on the cost of certain raw materials, direct labor and overhead, incremental stand up and separation costs, unfavorable manufacturing variances stemming from the temporary shutdown of our China domestic manufacturing at our facility in Suzhou, and FX. While on an adjusted basis, gross profit and margin for the fourth quarter of 2023 was $182.6 million and 64.8%.

公認會計準則毛利和利潤率同比小幅增長是由多種因素共同造成的，這些因素基本上是相互抵消的。這包括產品和地理組合的推動力、有利的同比定價以及成本改進計劃。這些項目被通貨膨脹對某些原材料成本、直接勞動力和管理費用、增量站立和分離成本、蘇州工廠暫時關閉中國國內製造所產生的不利製造差異以及外匯的影響所抵消。 。調整後，2023 年第四季的毛利和利潤率分別為 1.826 億美元和 64.8%。

As compared to our prior outlook, our adjusted gross margin during the fourth quarter of 2023 was better than we previously expected. And this was due to a higher than anticipated revenue, favorable geographic and product mix, pricing that exceeded our internal expectations, and our ability to manage the costs incurred to stand up the organization.

與我們先前的預期相比，我們在 2023 年第四季調整後的毛利率優於我們先前的預期。這是由於高於預期的收入、有利的地理和產品組合、超出我們內部預期的定價，以及我們管理維持組織所需成本的能力。

Turning to GAAP operating income and margin. During the fourth quarter, they were $25.8 million and 9.2% respectively. This compare to a loss of $3 million and 1.1% respectively in the prior year period. The increase in year-over-year GAAP operating income and margin is primarily due to the GAAP gross profit changes I just discussed, as well as the decrease in year-over-year impairment expense. This was somewhat offset by an increase in costs incurred to stand up the organization.

轉向 GAAP 營業收入和利潤率。第四季分別為 2,580 萬美元和 9.2%。相較之下，去年同期分別虧損 300 萬美元和 1.1%。 GAAP營業收入和利潤率年增主要是由於我剛才討論的GAAP毛利變化，以及減損費用年減。這在一定程度上被維持組織所需的成本增加所抵消。

While on an adjusted basis during the fourth quarter of 2023, operating income and margin totaled $65.2 million and 23.1%. The adjusted operating and margin performance during Q4 was in line with our prior expectations, as the over achievement at the adjusted gross profit and margin line was offset by additional R&D spending behind our insulin patch pump program as well as additional expenses incurred associated with employee benefits and stand-up activities.

2023 年第四季調整後，營業收入和利潤率總計 6,520 萬美元，年增 23.1%。第四季度調整後的營運和利潤率表現符合我們先前的預期，因為調整後的毛利潤和利潤率線的超額業績被我們的胰島素貼片幫浦項目背後的額外研發支出以及與員工福利相關的額外費用所抵消和站立活動。

Turning to the bottom line. GAAP net income and earnings per diluted share was $6 million and $0.10 during the fourth quarter of fiscal 2023. This compared to a loss of $17.2 million and $0.30 in the prior year period. The increase in year-over-year GAAP net income and diluted earnings per share is primarily due to the GAAP operating profit drivers I just discussed, somewhat offset by an increase in year-over-year interest expense associated with our variable interest rate debt.

轉向底線。 2023 財年第四季的 GAAP 淨利和稀釋每股收益分別為 600 萬美元和 0.10 美元。相較之下，去年同期分別虧損 1,720 萬美元和 0.30 美元。 GAAP 淨利潤和稀釋每股收益的同比增長主要是由於我剛才討論的 GAAP 營業利潤驅動因素，但與我們的可變利率債務相關的同比利息支出的增長在一定程度上抵消了這一增長。

While on an adjusted basis, net income and earnings per share were $34.1 million and $0.59 during the fourth quarter of fiscal 2023. Lastly, from a P&L perspective. For the fourth quarter of 2023, our adjusted EBITDA and margin totaled approximately $79.6 million and 28.2%.

調整後的 2023 財年第四季淨利和每股盈餘分別為 3,410 萬美元和 0.59 美元。最後，從損益表的角度來看。 2023 年第四季度，我們調整後的 EBITDA 和利潤率總計約為 7,960 萬美元和 28.2%。

Turning to our full-year 2023 financial results, this slide shows guidance progression as we move throughout fiscal-year 2023, ending with our actual fiscal-year 2023 results. As this slide depicts, we are pleased with our ability to raise our financial guidance following each quarter of the year, ultimately ending fiscal-year 2023 with revenue of approximately $1.121 billion, which was up approximately 1.6% on a constant currency basis. With adjusted gross margin of 67%, adjusted operating margin of 29.6%, adjusted earnings per share of $2.99, and adjusted EBITDA margin of 33.8%.

轉向我們的 2023 年全年財務業績，這張投影片顯示了我們在 2023 財年的整個過程中的指導進展，以我們的 2023 財年實際業績結束。正如這張投影片所示，我們對每年每季提高財務指引的能力感到滿意，最終在 2023 財年結束時營收約 11.21 億美元，以固定匯率計算成長約 1.6%。調整後毛利率為 67%，調整後營業利潤率為 29.6%，調整後每股盈餘為 2.99 美元，調整後 EBITDA 利潤率為 33.8%。

The ability to generate these results was no small task, particularly given all the separation-oriented activities that we focused on during the year. This is a testament to the resiliency of our products and our people who put in a countless number of hours to make Embecta successful.

產生這些結果的能力並非易事，特別是考慮到我們在這一年中重點開展的所有面向離職的活動。這證明了我們的產品和我們的員工的彈性，他們投入了無數的時間來使 Embecta 取得成功。

Now, let's take a closer look at our cash flow. We began the year with a cash balance of approximately $331 million and generated approximately $68 million of cash flow from operations, while using approximately $27 million on capital expenditures, translating into free cash flow generation of approximately $41 million.

現在，讓我們仔細看看我們的現金流。年初，我們的現金餘額約為 3.31 億美元，營運現金流量約為 6,800 萬美元，同時資本支出約為 2,700 萬美元，相當於自由現金流量約為 4,100 萬美元。

Additionally, we used approximately $34 million of cash towards our dividend. Ultimately ending the year with the cash balance of approximately $327 million, or roughly flat as compared to where we began the year. However, what you do not readily see is that our ending cash balance was negatively impacted by over $140 million of one-time operating expenses and capital expenditures associated with stand up and separation activities.

此外，我們還使用了約 3,400 萬美元的現金來支付股息。最終年底現金餘額約為 3.27 億美元，與年初基本持平。然而，您不容易看到的是，我們的期末現金餘額受到了超過 1.4 億美元的一次性營運費用以及與站立和離職活動相關的資本支出的負面影響。

That completes my prepared remarks as it relates to Embecta's financial results for the fourth quarter and full year of fiscal 2023. Next, I would like to discuss Embecta's preliminary 2024 financial guidance and certain underlying assumptions.

我準備好的評論到此結束，因為它涉及 Embecta 第四季度和 2023 財年全年的財務業績。接下來，我想討論 Embecta 的 2024 年初步財務指引和某些基本假設。

Before I go into all the details surrounding our fiscal-year-2024 guidance, let me remind you that in March of 2022, in advance of the spin occurring, we laid out our expectations for our business through fiscal-year 2024. Those expectations included that our revenue growth CAGR would remain flattish on a constant currency basis from fiscal-year 2022 through 2024, and that our adjusted EBITDA margin would be approximately 30%. And despite needing to absorb a significant decrease in the amount of contract manufacturing revenue as compared to our initial expectations and unprecedented inflationary environment as well as significant FX pressure as compared to our original expectations, our initial financial guidance ranges for fiscal year 2024 is aligned with our pre-spin projections.

在詳細介紹 2024 財年指引的所有細節之前，請容許我提醒您，在 2022 年 3 月，在重整發生之前，我們制定了對 2024 財年業務的預期。這些預期包括從2022 財年到2024 年，我們的營收成長複合年增長率將在固定貨幣基礎上保持平穩，調整後的EBITDA 利潤率將約為30%。儘管與我們最初的預期相比，我們需要吸收合約製造收入的大幅下降，以及前所未有的通膨環境以及與我們最初預期相比的巨大外匯壓力，但我們對 2024 財年的初步財務指導範圍與我們的旋轉前預測。

Beginning with revenue. On a constant currency basis, we currently anticipate that our revenues will be flat to down 2% as compared to 2023. At the low end of the guidance range, we are assuming about half the decline will result from no additional contract manufacturing revenue in 2024 as compared to 2023, while the remaining 1% headwind at the low end is associated with continued competitive shifts negatively impacting volume.

從收入開始。在固定貨幣基礎上，我們目前預計與 2023 年相比，我們的收入將持平或下降 2%。在指導範圍的低端，我們假設大約一半的下降將由於 2024 年沒有額外的合約製造收入而導致與2023 年相比，低端市場剩餘1% 的逆風與持續的競爭變化對銷量產生負面影響有關。

Lastly, at the low end, we are assuming that pricing will be flattish as compared to the prior year. While the high end of our constant currency revenue range includes all the same factors impacting our low end, except for a slightly smaller year-over-year headwind associated with contract manufacturing revenue as well as the ability for us to modestly raise prices. As such, the low end of our constant currency revenue growth for our core business, excluding contract manufacturing revenue, is a range of between negative 1% and positive 1%.

最後，在低端，我們假設定價將與前一年持平。雖然我們的固定貨幣收入範圍的高端包括影響我們低端的所有相同因素，但與合約製造收入相關的同比阻力略小以及我們適度提高價格的能力除外。因此，我們的核心業務（不包括合約製造收入）的恆定貨幣收入成長的低端範圍在負 1% 到正 1% 之間。

Turning to our thoughts on FX. Our initial guidance calls for a foreign currency headwind of approximately 1% during 2024. This assumption is based on foreign exchange rates that were in existence in the early November timeframe, including a euro to US dollar exchange rate of approximately 1.05. On a combined basis, our as-reported revenue guidance calls for a decline of between 1% and 3%, resulting in an initial revenue guide of between $1.085 billion $1.105 billion.

談談我們對外匯的看法。我們的初步指引要求 2024 年外匯逆風約為 1%。這項假設是基於 11 月初的外匯匯率，其中歐元兌美元匯率約為 1.05。綜合來看，我們報告的收入指導要求下降 1% 至 3%，導致初始收入指導在 10.85 億美元到 11.05 億美元之間。

Turning to adjusted gross margin, we currently anticipate that our 2024 adjusted gross margin will be in the range of between 63% and 64%, with the largest anticipated year-over-year drivers being headwinds associated with foreign exchange, increased raw material and labor cost, and the impact of negative year-over-year manufacturing variances stemming from lower syringe production as well as the temporary shutdown of our Suzhou China facility as it relates to production for the domestic Chinese market.

至於調整後毛利率，我們目前預計 2024 年調整後毛利率將在 63% 至 64% 之間，預計最大的同比驅動因素是與外匯、原材料和勞動力增加相關的不利因素成本，以及由於注射器產量下降以及我們蘇州中國工廠因與中國國內市場的生產有關而暫時關閉而造成的同比製造負差異的影響。

Continuing down the P&L, we expect that our SG&A will increase during fiscal 2024 as we incur additional expenses associated with standing up Embecta. Most notably associated with our IT systems and organization as well as costs associated with shipping and supply chain, as we move to our own distribution and transportation network.

繼續降低損益表，我們預計 2024 財年的銷售、管理費用將增加，因為我們將產生與維持 Embecta 相關的額外費用。當我們轉向自己的分銷和運輸網路時，最顯著的是與我們的 IT 系統和組織以及與運輸和供應鏈相關的成本。

We expect this to be offset by lower year-over-year TSA expense inclusive of costs associated with potential and conditional extension of certain TSAs as described by GAAP. In addition, during fiscal year 2024, we will incur depreciation and amortization expense associated with the implementation of a portion of our ERP system, and this will appear in other operating expense line.

我們預計這將被同比 TSA 費用降低所抵消，其中包括與 GAAP 描述的某些 TSA 的潛在和有條件延期相關的成本。此外，在 2024 財年，我們將產生與實施部分 ERP 系統相關的折舊和攤提費用，這將出現在其他營運費用項目中。

Turning to R&D, we anticipate continuing to invest behind our insulin patch pump program. And because of this, R&D as a percentage of revenue may exceed 7% during 2024. All totaled, we anticipate that our adjusted operating margin during 2024 will be between the range of 23.75% and 24.75%.

談到研發，我們預計將繼續投資於我們的胰島素貼片幫浦專案。因此，2024 年研發佔營收的百分比可能會超過 7%。總的來說，我們預計 2024 年調整後的營業利潤率將在 23.75% 至 24.75% 之間。

Moving to earnings. During 2024, our initial guidance calls for an adjusted diluted earnings per share range of between $1.90 and $2.10. This includes an assumption that our annual net interest expense will be approximately $116 million, that our annual adjusted tax rate will be approximately 22%, as well as an assumption that we will have approximately $58.1 million weighted average diluted shares outstanding. Lastly, our initial guidance for fiscal-year 2024 calls for an adjusted EBITDA margin of between 29.5% and 30.5%, which as I mentioned earlier, is consistent with our pre-spin expectations for fiscal-year 2024.

轉向盈利。 2024 年，我們的初步指引要求調整後的稀釋每股收益範圍在 1.90 美元至 2.10 美元之間。這包括假設我們的年度淨利息支出約為 1.16 億美元，我們的年度調整稅率約為 22%，以及假設我們的加權平均稀釋後流通股約為 5810 萬美元。最後，我們對 2024 財年的初步指導要求調整後的 EBITDA 利潤率在 29.5% 至 30.5% 之間，正如我之前提到的，這與我們對 2024 財年的分拆前預期一致。

And before I turn the call over to Dev for some final remarks, I'd like to highlight some considerations regarding the cadence of quarterly revenue expectations during 2024. Moving forward, we may not provide any further commentary concerning the quarterly cadence of revenue on an ongoing basis.

在我將電話轉給 Dev 進行最後發言之前，我想強調一些有關 2024 年季度收入預期節奏的考慮因素。展望未來，我們可能不會就 2024 年季度收入節奏提供任何進一步的評論。處於持續進行狀態。

During fiscal-year 2023, we generated approximately 49% of our as-reported revenue dollars during the first half of the year, including approximately 25% during the first quarter. During 2024, we currently anticipate generating a slightly lower percentage of our annual revenue during both the first quarter and first half of 2024 as compared to the prior year period, due in part to reduced contract manufacturing revenue as compared to the prior year.

在 2023 財年，我們報告營收的約 49% 是在上半年產生的，其中約 25% 是在第一季產生的。目前，我們預計 2024 年第一季和上半年的年收入百分比將略低於去年同期，部分原因是合約製造收入較前一年減少。

That completes my prepared remarks. And at this time, I would like to turn the call back over to Dev for some thoughts on the GLP-1 landscape and market opportunity. Dev.

我準備好的發言就到此結束。此時，我想將電話轉回給 Dev，詢問有關 GLP-1 前景和市場機會的一些想法。開發。

Thanks, Jake. If you haven't already seen it through posted or separate presentation on our website this morning, type-two diabetes considerations, please refer to this deck as we have tried to lay out the current GLP-1 landscape and how it touches various aspects of our business. GLP-1s have been a significant point of interest for investors, and I would like to take this opportunity to make a few comments regarding our observations and the impact that GLP-1s have had on our business.

謝謝，傑克。如果您今天早上還沒有透過我們網站上發布的或單獨的簡報了解二型糖尿病的注意事項，請參閱本簡報，因為我們已嘗試闡述當前的GLP-1 前景以及它如何影響糖尿病的各個方面。我們的業務。 GLP-1 一直是投資者關注的重點，我想藉此機會就我們的觀察以及 GLP-1 對我們業務的影響發表一些評論。

As we reflect over the past five years and focus on weekly GLP-1s, we observed significant growth in prescriptions with an impressive CAGR of over 40%. In contrast, insulin prescriptions have remained relatively stable, experiencing a slight decline on a low of single-digit CAGR basis.

正如我們回顧過去五年並關注每週 GLP-1 一樣，我們觀察到處方量顯著增長，複合年增長率超過 40%，令人印象深刻。相較之下，胰島素處方量保持相對穩定，複合年增長率略有下降，僅為個位數。

Regarding the number of people switching from insulin to GLP-1 drugs, the data shows that is relatively low at around 1%. As you know, our business is highly geographically diversified, with almost 50% of revenue being generated outside the US where cost considerations usually limit the access of newer high-priced therapies.

關於從胰島素轉向 GLP-1 藥物的人數，數據顯示相對較低，約 1%。如您所知，我們的業務在地理上高度多元化，近 50% 的收入來自美國境外，而出於成本考慮，這些地區通常會限制獲得更新的高價療法。

Turning our attention to our US business, we have seen continued stability over the period where weekly GLP-1s have grown at a CAGR of greater than 40%, and pump adoptions for insulin delivery has steadily increased. While there may have been small decreases in volume, there have been offset by pricing dynamics resulting in a generally flat revenue CAGR. This data supports our hypothesis that GLP-1s have delayed the onset of insulinization, but not eliminated.

將我們的注意力轉向我們的美國業務，我們看到在此期間持續穩定，每週 GLP-1 的複合年增長率超過 40%，胰島素輸送泵的採用率穩步增加。雖然銷售量可能略有下降，但定價動態抵消了這一影響，導致收入複合年增長率整體持平。這些數據支持我們的假設，即 GLP-1 延遲了胰島素治療的開始，但並未消除。

That's where the focus on the differences between type-one and type-two diabetes. Type one results from an autoimmune response that leads to destruction of insulin-producing beta cells in the pancreas. There has not been any data that we have seen demonstrating the GLP-1s have the ability to reverse this process and to regenerate beta cells.

這就是關註一型和二型糖尿病之間差異的地方。一型是由自體免疫反應引起的，導致胰臟中產生胰島素的β細胞被破壞。我們尚未看到任何數據證明 GLP-1 具有逆轉此過程並再生 β 細胞的能力。

GLP-1s appear to enhance the body utilization of available insulin, potentially explaining the delay with both the elimination of insulin use. Type-two diabetes is heterogeneous in that diagnosis are significant portion of patients already have elevated inventory levels. When the criteria for the diagnosis of diabetes is unmet, it is the result of beta cells no longer being able to keep up with demand. In this case too, we have not seen beta demonstrating GLP-1's ability to reverse this continued degradation of beta cell function.

GLP-1 似乎可以增強身體對可用胰島素的利用，這可能解釋了消除胰島素使用的延遲。二型糖尿病具有異質性，因為診斷時很大一部分患者的庫存水準已經升高。當不符合糖尿病的診斷標準時，這是β細胞無法滿足需求的結果。在這種情況下，我們也沒有看到β證明GLP-1能夠逆轉β細胞功能的持續退化。

Moreover, while GLP-1s have demonstrated efficacy in reducing the total daily insulin dose, it is uncertain to what extent this may translate to reduce frequency of injections and injection devices, which are key metrics for our business. Finally, we see an opportunity for investors to participate in the secular growth of GLP-1s over the coming years. GLP-1 presentations include vials, pens, and auto injectors.

此外，雖然 GLP-1 已證明能夠有效減少每日胰島素總劑量，但尚不確定這在多大程度上可以轉化為減少注射和注射設備的頻率，而注射和注射設備是我們業務的關鍵指標。最後，我們看到投資者有機會參與未來幾年 GLP-1 的長期成長。 GLP-1 演示包括小瓶、筆和自動注射器。

This presents an opportunity for us. Things with appropriate regulatory approvals in certain markets, insulin syringes can be used to build the GLP-1 drugs presented in vials. Pen needles that we manufacture and supply today are already compatible with the pens used to deliver GLP-1s. While some pharmaceutical companies might package their own pen needles, in other cases, we offer a valuable solution.

這為我們提供了一個機會。在某些市場獲得適當監管批准後，胰島素注射器可用於製造小瓶中的 GLP-1 藥物。我們今天製造和供應的筆針已經與用於輸送 GLP-1 的筆相容。雖然一些製藥公司可能會包裝自己的筆針，但在其他情況下，我們提供了有價值的解決方案。

But when it comes to auto injectors, it is worth noting that these devices involve injection molded parts with needles. An area in which we have a well-established core competency, to produce approximately 8 billion units of high-quality injection-molded parts with needles annually. However, expanding into this market may require Embecta to embark upon business development or partnerships. Entering this space organically would involve a longer timeframe as it would necessitate engaging with pharmaceutical companies during the drug development process and progressing through it with them.

但說到自動注射器，值得注意的是，這些設備涉及帶有針頭的注塑零件。我們在該領域擁有完善的核心能力，每年可生產約 80 億件高品質帶針注塑件。然而，拓展這一市場可能需要 Embecta 著手業務開發或建立合作夥伴關係。有機地進入這個領域將需要更長的時間，因為它需要在藥物開發過程中與製藥公司合作並與他們一起前進。

In summary, while we acknowledge the changing landscape brought about by GLP-1s, we see there's an opportunity to potentially expand our product offerings in line with evolving market demands.

總之，雖然我們承認 GLP-1 帶來的變化，但我們看到有機會根據不斷變化的市場需求擴大我們的產品範圍。

This completes my prepared remarks. And with that, let me turn the call over to the operator for questions.

我準備好的發言到此結束。接下來，讓我將電話轉給接線員詢問問題。

Thank you. (Operator Instructions) Marie Thibault, BTIG.

謝謝。 （操作員說明）Marie Thibault，BTIG。

Hi, good morning. Congrats on a good quarter, and thanks for taking the questions. I wanted to start here, ask a little bit about the guidance set for next year. I heard about your assumptions built into the revenue range, but I want to ask a little more detail on the gross margin side. I think that is just a bit higher than we were expecting, consensus was expecting, and certainly outperform on that metric. What's driving that gross margin assumption?

早安.恭喜本季表現良好，並感謝您提出問題。我想從這裡開始，詢問一下明年的指導方針。我聽說了您對收入範圍的假設，但我想詢問有關毛利率方面的更多細節。我認為這比我們的預期、共識的預期要高一點，並且在該指標上肯定會優於其他市場。是什麼推動了毛利率假設？

Yeah, Marie, and thanks for the question. So from a -- during 2023, we generated adjusted gross margin of about 67%. We certainly exceeded our initial expectations coming into the year, and we are obviously quite pleased with that. And if you think about the drivers of going from about 67% in 2023, down to, let's call it the midpoint of our guidance range of about 63.5% in 2024, it's really being driven by three things almost equally. FX is a large headwind for us as we look into 2024. We expect that headwinds to be about 130 basis points year over year.

是的，瑪麗，謝謝你的提問。因此，從 2023 年開始，我們的調整後毛利率約為 67%。我們今年確實超出了我們最初的預期，我們顯然對此感到非常滿意。如果你考慮一下從 2023 年的約 67% 下降到 2024 年我們指導範圍的中點約 63.5% 的驅動因素，那麼它實際上是由幾乎同等的三件事驅動的。展望 2024 年，外匯對我們來說是一個巨大的阻力。我們預期阻力將比去年同期增加約 130 個基點。

The next largest driver is really increased raw material and labor costs, including the additional increased costs associated with the cannulas that we purchase from BD. And then lastly, it really comes down to the negative manufacturing variances, coming from the fact that we won't be able to manufacture for a period of time in our facility in China, specifically for the Chinese market.

第二大驅動因素實際上是原材料和勞動成本的增加，包括與我們從 BD 購買的插管相關的額外成本增加。最後，這實際上歸結為負面的製造差異，因為我們在中國的工廠在一段時間內無法生產，特別是針對中國市場的生產。

So about half of our revenue in China is product that is manufactured in China and sold in China. And until we get all the necessary product registrations and approvals from the local Chinese regulators, that manufacturing for the China for China market is going to be shut down for a period of time.

因此，我們在中國大約一半的收入是在中國製造並在中國銷售的產品。在我們獲得中國當地監管機構所有必要的產品註冊和批准之前，針對中國市場的製造將關閉一段時間。

So it really comes down to those three drivers, again, almost equally driving the year-over-year margin change. Those being FX, the increase the raw material and labor costs, and then again, some manufacturing variants headwinds coming from the China plant.

因此，這實際上歸結為這三個驅動因素，幾乎同樣地推動了利潤率的年比變化。其中包括外匯、原材料和勞動力成本的增加，以及來自中國工廠的一些製造變體的阻力。

Okay. That's helpful, Jake. And as a quick follow up on your guide, I know in the past, you've had US competitors, supplies and constraints which was helping international sales. Is that built into your assumptions for revenue next year?

好的。這很有幫助，傑克。作為對您的指南的快速跟進，我知道過去您有美國的競爭對手、供應和限制，這有助於國際銷售。這是否已納入您對明年收入的假設？

It is, Marie, it is built into our assumptions for next year.

是的，瑪麗，它已納入我們明年的假設中。

Okay. Then, that will continue. Okay. And then, I wanted to ask about the Medicare part D win. Three of the top players there giving Embecta exclusive dual-preferred status. What does that mean? And will that be material to sales in some way? How quickly do some of this preferred status wins convert into revenue?

好的。然後，這種情況還會持續下去。好的。然後，我想問一下有關 Medicare D 部分獲勝的問題。三位頂級球員賦予 Embecta 獨家雙重優先地位。這意味著什麼？這會在某種程度上對銷售產生重大影響嗎？這些優先地位的勝利要多快才能轉化為收入？

We are extremely pleased with those wins, Marie. Medicare prescription plans used to be open access. Three of the ones that we have won now, we are either exclusive provider for pen needles or dual-preferred status. This is an important category for us because as you know, it covers seniors.

我們對這些勝利感到非常高興，瑪麗。醫療保險處方計劃過去是開放獲取的。我們現在贏得了三個，我們要么是筆針的獨家供應商，要么是雙重優先供應商。這對我們來說是一個重要的類別，因為如您所知，它涵蓋了老年人。

Seniors have a disproportionately high prevalence of diabetes, and we win these on the same criteria as other commercial plans, quality, brands, supply continuity. It's been incorporated into our guidance. These three plans cover a large portion of the Medicare beneficiaries that have prescription plans. And so, we're very pleased to have won these, and it's certainly incorporated into our guidance for next year.

老年人的糖尿病盛行率異常高，我們以與其他商業計劃、品質、品牌、供應連續性相同的標準贏得了這些獎項。它已納入我們的指南中。這三個計劃涵蓋了大部分擁有處方計劃的 Medicare 受益人。因此，我們很高興贏得這些獎項，這肯定會納入我們明年的指導中。

All right. Very helpful. Thanks for taking the question.

好的。很有幫助。感謝您提出問題。

Thank you, Marie.

謝謝你，瑪麗。

(Operator Instructions) Mike Polark, Wolfe Research.

（操作員說明）Mike Polark，Wolfe Research。

Hi, good morning. Thank you for taking the question. For fiscal '24, if you said it, I missed it. But can you level set on constant currency growth expectations for the Americas versus international, maybe, for the core injection business excluding contract manufacturing?

早安.感謝您提出問題。對於 24 財年，如果你這麼說，我就錯過了。但是，您能否對美洲與國際（也許是不包括合約製造的核心注塑業務）設定恆定的貨幣成長預期？

Yeah, Mike, good morning. We don't separate out our constant currency guidance by region but let me tell you that as we look ahead into 2024, it's going to be similar to what we have spoken about previously and experience so far. So broadly speaking, the way we see the market dynamics play out is that US tends to be stable.

是的，麥克，早安。我們不會按地區單獨列出恆定的貨幣指導，但讓我告訴您，當我們展望 2024 年時，它將與我們之前談到的和迄今為止的經驗類似。從廣義上講，我們看到市場動態的表現是美國趨於穩定。

Any volume changes are typically offset by pricing. Emerging markets has been and will likely continue to be a source of growth for us, largely driven by demographic changes over there. And then, other developed markets sit somewhere in between. And so, what we've seen in 2023 and certainly years prior to that resembles that, and we don't expect that to change in any material fashion for 2024.

任何數量的變化通常都會被定價所抵消。新興市場已經並將繼續成為我們的成長源泉，這主要是由那裡的人口變化所推動的。然後，其他已開發市場則介於兩者之間。因此，我們在 2023 年以及之前幾年所看到的情況與此類似，我們預計這種情況在 2024 年不會發生任何實質變化。

Understood. Appreciate that. I have two more, if I may. A follow up to Marie's question on the part D callout interest, I guess my specific questions are why now? Why are these plans going from open access to exclusive or dual-preferred? And as you consider those opportunities, can you frame it at a high level what the price volume tradeoffs might be for Embecta and narrowing the network?

明白了。感謝。如果可以的話，我還有兩個。瑪麗關於 D 部分標註興趣的問題的後續，我想我的具體問題是為什麼現在？為什麼這些計劃從開放取用變成獨佔或雙重優先？當您考慮這些機會時，您能否從較高的層面來考慮 Embecta 可能需要進行的價格量權衡以及縮小網路範圍？

Yeah. The why now question, Mike, honestly is going to be a little difficult to answer. These are operated by some of the same players that run commercial plans. The commercial plans are obviously under contract for us. We think about it as a win for reasons that I explained prior when I was talking about Marie. Just given the population base that it covers and the prevalence of diabetes, and then, potential insulin use in that sector.

是的。麥克，老實說，現在的問題有點難回答。這些是由一些運行商業計劃的相同參與者運營的。商業計劃顯然是我們簽訂的合約。我們認為這是一場勝利，原因我之前在談論瑪麗時解釋過。考慮到它所涵蓋的人口基數和糖尿病的盛行率，以及該領域潛在的胰島素使用情況。

With respect to price volume dynamics, obviously, wouldn't want to describe them for this particular plans. But generally speaking, once you get dual preferred -- dual status or exclusive preferred status, our share increases significantly beyond what it typically is. And then, there are rebates that are given. And those rebates again, while I won't comment on this plan specifically, vary by payer. They can go into the low teens or sometimes in the high teens, sometimes slightly higher than that. But generally speaking, that's the dynamic that occurs.

關於價格量動態，顯然，不想為這個特定計劃描述它們。但一般來說，一旦您獲得雙重優先權——雙重身份或獨家優先身份，我們的份額就會大大超出通常的水平。然後，還有回扣。雖然我不會具體評論該計劃，但這些回扣仍因付款人而異。它們可以進入低十幾歲，有時達到高十幾歲，有時略高於此。但一般來說，這就是發生的動態。

Helpful. And then my last one, just on TSA. I heard the comments on limited extensions with BD. Can you level set, and if you said the summary number for fiscal 2023, I missed it, but I think we were thinking $60 million of total TSA expense in '23. Can you frame how much TSA expense might be in '24? And that's it. Thanks so much for taking the questions.

有幫助。然後是我的最後一篇，就在 TSA 上。我聽到了關於 BD 有限延期的評論。您能否說明一下，如果您說了 2023 財年的匯總數字，我錯過了，但我認為我們考慮的是 23 年 TSA 總費用為 6000 萬美元。您能否列出 24 年 TSA 費用可能是多少？就是這樣。非常感謝您提出問題。

Yeah. Thank you, Mike. I'll let Jake answer the TSA expense for '24, but let me broadly at least frame the TSA, where we are in the TSA. So first of all, we are extremely pleased with the progress that we have made so far.

是的。謝謝你，麥克。我會讓傑克回答 24 年的 TSA 費用，但讓我至少大致框架一下 TSA，我們在 TSA 中的位置。首先，我們對迄今為止所取得的進展感到非常滿意。

I'd like to remind everybody, we're talking about taking a business that had been part of a much larger business for close to 100 years and now standing it up as a separate company. And so, if you think about all the separation work that our teams accomplished, including setting up the HR information system, the Suzhou demerger which was a big project for us and where we've achieved important milestones on implementations for ERPs, distribution networks, shared services, and 60% of our markets, and two of our three plants, so very pleased with all of that.

我想提醒大家，我們正在討論將一家近 100 年來一直屬於一家規模大得多的企業的業務，現在將其作為一家獨立的公司獨立出來。因此，如果你考慮我們團隊完成的所有分離工作，包括建立人力資源資訊系統、蘇州分拆，這對我們來說是一個大項目，我們在 ERP、分銷網絡的實施方面取得了重要的里程碑，共享服務、我們60% 的市場以及我們三個工廠中的兩個，所以對這一切感到非常滿意。

What we want to do essentially is for the remainder plant and the remainder of our markets, really phase these implementations out. That allows us to reduce the risk of operational disruption that can happen. So this is a extension that we requested from BD, BD will undertake a supplemental -- a private letter ruling process with the IRS. And upon getting an acceptable ruling, we would get an extension that would allow us to do the remaining markets into or potentially assumed more phases, which would essentially take us through maybe, early fiscal 2025 to get done.

我們想要做的基本上是對於剩餘的工廠和我們的剩餘市場，真正逐步淘汰這些實施。這使我們能夠降低可能發生的營運中斷的風險。因此，這是我們向 BD 請求的延期，BD 將與 IRS 進行補充性的私訊裁決程序。在獲得可接受的裁決後，我們將獲得延期，使我們能夠將剩餘市場納入或可能採取更多階段，這實際上可能會讓我們在 2025 財年年初完成。

Let me turn it over to Jake to talk about the expenses.

讓我把它交給傑克談談費用。

Yeah, Mike. So in 2023, you're correct. We incurred about $63 million worth of TSA expense in 2023. And then, our guidance assumes for 2024, inclusive of an extension being granted, that we would incur somewhere between, let's call it $30 million to $35 million worth of TSA expense in 2024.

是的，麥克。所以到 2023 年，你是對的。 2023 年，我們產生了價值約 6300 萬美元的 TSA 費用。然後，我們的指導假設到 2024 年，包括批准的延期，我們將在 2024 年產生價值 3000 萬美元至 3500 萬美元的 TSA 費用。

And obviously, the fact that we still are able to generate around that, let's call it, a midpoint of our guidance assumes a 30% adjusted EBITDA margin, that's consistent with what we had expected obviously pre-spin. And as we said in our prepared remarks, prior to spin, we certainly did not think that we would incur nearly the amount of inflationary negative headwinds that we've obviously seen in two years plus now post spin.

顯然，事實上我們仍然能夠圍繞這一點產生，我們的指導中點假設調整後的 EBITDA 利潤率為 30%，這與我們顯然在旋轉前的預期一致。正如我們在準備好的發言中所說，在旋轉之前，我們當然不認為我們會遭受近兩年來明顯看到的通膨負面阻力。

Obviously, didn't think that we would incur the same level of FX headwinds, nor quite frankly, did we originally think that we would need an extension and have to incur some additional TSA costs. So I think it really just points back to the fact that being able to still think that we can generate somewhere between that 29.5% and 30.5% adjusted EBITDA margin is really a testament to the strength and resiliency of the base business here.

顯然，我們並不認為我們會遭受同樣程度的外匯逆風，坦白說，我們最初也沒有認為我們需要延期並不得不承擔一些額外的 TSA 費用。因此，我認為這實際上只是回到了一個事實，即我們仍然認為我們可以產生 29.5% 至 30.5% 的調整後 EBITDA 利潤率，這確實證明了這裡基礎業務的實力和彈性。

Thank you so much.

太感謝了。

Thank you. There are no further questions. I'd like to turn the call over to Dev for closing remarks.

謝謝。沒有其他問題了。我想將電話轉給 Dev 進行結束語。

Before we conclude the call, I would like to express my gratitude to all my colleagues around the world for the immense amount of work that they have been doing over the past 1.5 year to stand up Embecta as an independent company. And the fact that they have been doing so without impacting our customers is a testament to their commitment of fulfilling our mission of developing and providing solutions that make life better for people living with diabetes.

在結束電話會議之前，我要向世界各地的所有同事表示感謝，感謝他們在過去 1.5 年中為將 Embecta 打造為獨立公司所做的大量工作。事實上，他們這樣做並沒有影響我們的客戶，這一事實證明了他們致力於履行我們的使命，即開發和提供解決方案，讓糖尿病患者的生活變得更好。

Thank you all for attending our call and for your interest in our business.

感謝大家參加我們的電話會議以及對我們業務的興趣。

Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.

感謝您的參與。這確實結束了程序，您現在可以斷開連接。大家，祝你有美好的一天。