On this page of StockholderLetter.com we present the latest annual shareholder letter from Embecta Corp. — ticker symbol EMBC. Reading current and past EMBC letters to shareholders can bring important insights into the investment thesis.
Annual Report 2024
embecta is a global diabetes care company that is leveraging its 100-year legacy in insulin delivery to empower people with diabetes to live their best life through innovative solutions, partnerships, and the passion of approximately 2,000 employees around the globe. For more information, visit embecta.com or follow our social channels on LinkedIn, Facebook, and Instagram. Twelve Months Fiscal Year 2024 Results Revenues by geographic region are as follows: Twelve months ended September 30 Dollars in millions % Increase/(Decrease) 2024 Reported Revenue Growth 2023 Currency Impact Adjustment Impact Adjusted Constant Currency Revenue Growth Reported Revenues Adjustment Adjusted Revenues Reported Revenues Adjustment Adjusted Revenues United States $607.2 $607.2 $601.4 $601.4 1.0% 1.0% International* 515.9 (4.1) 520.0 519.4 519.4 (0.7) (1.2) (0.8) 1.3 $1,123.1 $(4.1) $1,127.2 $1,120.8 $1,120.8 0.2% (0.5)% (0.4)% 1.1% Total $1.1 billion revenue 54 46 US vs international revenue split In evaluating our operating performance, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial measures including (i) Adjusted Revenues, (ii) earnings before interest, taxes, depreciation, and amortization ( EBITDA ), (iii) Adjusted EBITDA and Adjusted EBITDA Margin, (iv) Adjusted Gross Profit and Adjusted Gross Profit Margin, (v) Adjusted Constant Currency Revenue Growth, (vi) Adjusted Operating Income and Adjusted Operating Income Margin, and (vii) Adjusted Net Income and Adjusted earnings per diluted share. These non-GAAP financial measures are indicators of our performance that are not required by, or presented in accordance with, GAAP. They are presented with the intent of providing greater transparency to financial information used by us in our financial analysis and operational decision-making. We believe that these non-GAAP measures provide meaningful information to assist investors, stockholders and other readers of our consolidated financial statements in making comparisons to our historical operating results and analyzing the underlying performance of our results of operations. However, the presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the company s results as reported under GAAP. Because not all companies use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies. The Company uses non-GAAP financial measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it regards to be a meaningful alternative representation of the underlying operating performance of the business. Adjusted Constant Currency Revenue Growth is based upon Reported Revenues, adjusted to exclude, depending on the period presented, the items described in Adjusted Revenues and to eliminate the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. The impact of changes in foreign currency may vary significantly from period to period, and such changes generally are outside of the control of our management. We believe that this measure facilitates a comparison of our operating performance exclusive of currency exchange rate fluctuations that do not reflect our underlying performance or business trends. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Results on an Adjusted Constant Currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.
To our stockholders, customers and employees, The past year marked a significant milestone for embecta and not just because we marked 100 years since our predecessors introduced the first syringe specifically designed for insulin delivery. Fiscal year 2024 was notable as the year we completed major complex programs to stand up our own systems and processes while maintaining the high level of service our customers count on. It also marked the final year of the multi-year financial expectations we had provided to the investment community prior to our spinoff, and we were proud to exceed those expectations since becoming independent despite having to overcome unanticipated macroeconomic and operating challenges such as high inflation, rapidly rising interest rates and supply chain issues. We ve continued to be a valued partner to the diabetes care community thanks to our core strengths including a global commercial channel which reaches healthcare providers, pharmacists, caregivers, educators, and channel partners in over 100 countries and our high-volume, high-quality manufacturing expertise that enables us to produce around 8 billion insulin injection devices each year. Fiscal 2024 highlights Since becoming an independent company, our global team has focused their efforts on three strategic priorities: strengthening our core business; continuing the process of separating and standing up embecta as an independent company; and investing for growth. Our core business has remained stable thanks to our long-standing reputation for safe, reliable, and cost-effective injection devices, and we are proud to be a trusted provider of educational resources for clinicians, caregivers and people with diabetes. In the United States, our products are listed as an exclusive or dual-preferred brand with three of the top Medicare part D payers. In Germany, we recently introduced a new small-pack pen needle product to address the unmet needs of the growing number of customers who are using GLP-1 agonists, and plan to leverage our leadership and expertise in pen needle manufacturing by expanding this program to other countries. In Asia, we broadened our presence in e-commerce by launching on additional platforms and in new countries. One of the most remarkable achievements was the tremendous progress we made in setting up our own systems and processes. At the beginning of the fiscal year, the only part of our business that had moved onto our new ERP and manufacturing execution system was our plant in Suzhou, China. One year later, all three of our manufacturing sites and about 98 percent of our revenue is operating on embecta s own systems and utilizing our own newly established distribution network and shared services infrastructure. That is tremendous progress in a very short period of time, and took considerable effort from everyone across the *In 2024, International includes the recognition of incremental Italian payback accruals resulting from the two July 22, 2024 rulings by the Constitutional Court of Italy relating to certain prior years since 2015 in order to arrive at Adjusted Revenues. nearly 30 million people using our products in more than 100 countries
organization, who worked hard to ensure that we could execute this important transition without disrupting our customers or the people they serve. We identified several growth opportunities in key markets by building partnerships that leverage our local commercial organizations to offer customers a broader suite of products that may address critical needs for the people with diabetes they serve. Among these are an exclusive agreement for the distribution of an innovative insulin pump to customers throughout Mainland China, as well as a partnership where our commercial team in France will add blood glucose monitors to the range of products they carry. Each of these agreements aligns with our mission to provide solutions that make life better for people living with diabetes while giving our customers better access to a range of diabetes care options for the people they serve. This past fiscal year was also notable as embecta filed its first 510(k) submission and received subsequent clearance for such submission from the U.S. Food and Drug Administration (FDA) for our proprietary disposable insulin delivery system. While we ultimately decided to concentrate our resources on our core business and discontinue our insulin patch pump program, achieving FDA clearance represented a significant achievement by the team that developed this innovative and differentiated product, which we believe could address a significant unmet need for people contemplating insulin pump therapy. Our commitment to the global diabetes community Our employees feel a deep personal connection to the diabetes community, and it was especially moving to see how many on our team heartily embraced our 100 Acts of Kindness campaign as we celebrated 100 years of commitment to the global diabetes community. These acts included community service, educational workshops, charitable donations and personal gestures of kindness, all aligned with our ongoing mission to make life better for people living with diabetes. In addition, members of our team in Canada memorialized this legacy by laying a commemorative brick at the Banting House National Historic Site the birthplace of insulin on World Diabetes Day. We continued our tradition of inviting advocacy and professional groups to join us on stage to ring the Nasdaq Closing Bell in recognition of Diabetes Awareness Month in November 2024, this time celebrating the strength, well-being and individuality of people living with diabetes. We share a common mission and vision with these organizations, and this event gives them a highly visible platform to raise their profile among the estimated 537 million people worldwide who are living with diabetes , as well as their friends, loved ones and caregivers. ~8 billion Education is foundational to our mission, and in 2024, our team in Asia launched emERGE, a diabetes educational program developed in partnership with Diabetes Singapore and the Association of Diabetes Educators Singapore. The virtual program, which is available in 11 countries, seeks to enhance the skills and knowledge of healthcare professionals with the latest insights and best practices in diabetes care. injection devices manufactured annually Magliano DJ, Boyko EJ; IDF Diabetes Atlas 10th edition scientific committee. IDF DIABETES ATLAS. 10th edition. Brussels: International Diabetes Federation; 2021. https://www.ncbi.nlm.nih.gov/books/NBK581934/
Looking ahead to Fiscal 2025 Building on everything that we have accomplished in the last two and a half years, our focus now moves to the next phase of embecta s transformation back to growth, guided by three key strategic priorities: Strengthening the business: In addition to continuing to deepen our relationships with our customers, we will begin to execute a comprehensive brand transition plan, starting with North America in Fiscal 2025. ~2,000 employees worldwide Expanding our product portfolio: We will work to identify new areas to expand our reach and increase our impact, leveraging our core strengths in our global commercial channel and in high-volume, high-quality manufacturing. Increasing financial flexibility: We are committed to our goal of refining our processes, eliminating inefficiencies, and optimizing every aspect of our operations to ensure we remain lean, agile, and ready to adapt. By reducing net leverage and debt, we intend to create a stronger financial base that enables us to make future strategic investments and remain resilient, regardless of market conditions. We will continue to add to the rich legacy of a 100-year-old business that has made a difference in countless lives. Our approximately 2,000 employees around the world have accomplished so much in the short time since we became an independent company, and they are eager to have an even greater impact in the year ahead. Thank you for being by our side as we continue to advance every day together. Devdatt (Dev) Kurdikar President and Chief Executive Officer LTG (Ret.) David F. Melcher Non-executive Chairman of the Board
 • shareholder letter icon 12/19/2024 Letter Continued (Full PDF)
 • stockholder letter icon 12/19/2023 EMBC Stockholder Letter
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EMBC Shareholder/Stockholder Letter Transcript:

Annual Report 2024

embecta is a global diabetes care company that is leveraging its 100-year legacy in insulin delivery to empower
people with diabetes to live their best life through innovative solutions, partnerships, and the passion of
approximately 2,000 employees around the globe. For more information, visit embecta.com or follow our social
channels on LinkedIn, Facebook, and Instagram.
Twelve Months Fiscal Year 2024 Results
Revenues by geographic region are as follows:
Twelve months ended September 30
Dollars in
millions
% Increase/(Decrease)
2024
Reported
Revenue
Growth
2023
Currency
Impact
Adjustment
Impact
Adjusted
Constant
Currency
Revenue
Growth
Reported
Revenues
Adjustment
Adjusted
Revenues
Reported
Revenues
Adjustment
Adjusted
Revenues
United States
$607.2

$607.2
$601.4

$601.4
1.0%


1.0%
International*
515.9
(4.1)
520.0
519.4

519.4
(0.7)
(1.2)
(0.8)
1.3
$1,123.1
$(4.1)
$1,127.2
$1,120.8

$1,120.8
0.2%
(0.5)%
(0.4)%
1.1%
Total
$1.1
billion

revenue


54
46
US vs international
revenue split
In evaluating our operating performance, we supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial measures including (i) Adjusted
Revenues, (ii) earnings before interest, taxes, depreciation, and amortization (   EBITDA   ), (iii) Adjusted EBITDA and Adjusted EBITDA Margin, (iv) Adjusted Gross Profit and Adjusted Gross Profit
Margin, (v) Adjusted Constant Currency Revenue Growth, (vi) Adjusted Operating Income and Adjusted Operating Income Margin, and (vii) Adjusted Net Income and Adjusted earnings per diluted
share. These non-GAAP financial measures are indicators of our performance that are not required by, or presented in accordance with, GAAP. They are presented with the intent of providing
greater transparency to financial information used by us in our financial analysis and operational decision-making. We believe that these non-GAAP measures provide meaningful information to
assist investors, stockholders and other readers of our consolidated financial statements in making comparisons to our historical operating results and analyzing the underlying performance of
our results of operations. However, the presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the company   s results
as reported under GAAP. Because not all companies use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of other
companies. The Company uses non-GAAP financial measures in its operational and financial decision making, and believes that it is useful to exclude certain items in order to focus on what it
regards to be a meaningful alternative representation of the underlying operating performance of the business.
Adjusted Constant Currency Revenue Growth is based upon Reported Revenues, adjusted to exclude, depending on the period presented, the items described in Adjusted Revenues and to
eliminate the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. The impact of changes in foreign currency may vary
significantly from period to period, and such changes generally are outside of the control of our management. We believe that this measure facilitates a comparison of our operating performance
exclusive of currency exchange rate fluctuations that do not reflect our underlying performance or business trends. These results should be considered in addition to, not as a substitute for, results
reported in accordance with GAAP. Results on an Adjusted Constant Currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not
measures of performance presented in accordance with GAAP.

To our stockholders, customers and employees,
The past year marked a significant milestone for embecta     and not just because we marked 100 years since our
predecessors introduced the first syringe specifically designed for insulin delivery.
Fiscal year 2024 was notable as the year we completed major complex programs to stand up our own systems and
processes while maintaining the high level of service our customers count on. It also marked the final year of the
multi-year financial expectations we had provided to the investment community prior to our spinoff, and we were
proud to exceed those expectations since becoming independent despite having to overcome unanticipated
macroeconomic and operating challenges such as high inflation, rapidly rising interest rates and supply chain issues.
We   ve continued to be a valued partner to the diabetes care community thanks to our core strengths including a
global commercial channel which reaches healthcare providers, pharmacists, caregivers, educators, and channel
partners in over 100 countries and our high-volume, high-quality manufacturing expertise that enables us to produce
around 8 billion insulin injection devices each year.
Fiscal 2024 highlights
Since becoming an independent company, our global team has focused their efforts on three strategic priorities:
strengthening our core business; continuing the process of separating and standing up embecta as an independent
company; and investing for growth.
Our core business has remained stable thanks to our long-standing reputation for safe, reliable, and cost-effective
injection devices, and we are proud to be a trusted provider of educational resources for clinicians, caregivers and
people with diabetes. In the United States, our products are listed as an exclusive or dual-preferred brand with three of
the top Medicare part D payers. In Germany, we recently introduced a new small-pack pen needle product to address
the unmet needs of the growing number of customers who are using GLP-1 agonists, and plan to leverage our
leadership and expertise in pen needle manufacturing by expanding this program to
other countries. In Asia, we broadened our presence in e-commerce by
launching on additional platforms and in new countries.
One of the most remarkable achievements was the tremendous
progress we made in setting up our own systems and
processes. At the beginning of the fiscal year, the only part
of our business that had moved onto our new ERP and
manufacturing execution system was our plant in
Suzhou, China. One year later, all three of our
manufacturing sites     and about 98 percent of our
revenue     is operating on embecta   s own systems and
utilizing our own newly established distribution
network and shared services infrastructure. That is
tremendous progress in a very short period of time,
and took considerable effort from everyone across the
*In 2024, International includes the recognition of incremental Italian
payback accruals resulting from the two July 22, 2024 rulings by the
Constitutional Court of Italy relating to certain prior years since 2015
in order to arrive at Adjusted Revenues.
nearly
30
million
people using our products
in more than
100
countries

organization, who worked hard to ensure that we could execute this important transition without disrupting our
customers or the people they serve.
We identified several growth opportunities in key markets by building partnerships that leverage our local
commercial organizations to offer customers a broader suite of products that may address critical needs for the
people with diabetes they serve. Among these are an exclusive agreement for the distribution of an innovative
insulin pump to customers throughout Mainland China, as well as a partnership where our commercial team in
France will add blood glucose monitors to the range of products they carry. Each of these agreements aligns with
our mission to provide solutions that make life better for people living with diabetes while giving our customers
better access to a range of diabetes care options for the people they serve.
This past fiscal year was also notable as embecta filed its first 510(k) submission and received subsequent
clearance for such submission from the U.S. Food and Drug Administration (FDA) for our proprietary disposable
insulin delivery system. While we ultimately decided to concentrate our resources on our core business and
discontinue our insulin patch pump program, achieving FDA clearance represented a significant achievement by
the team that developed this innovative and differentiated product, which we believe could address a significant
unmet need for people contemplating insulin pump therapy.
Our commitment to the global diabetes community
Our employees feel a deep personal connection to the diabetes community, and it was especially moving to
see how many on our team heartily embraced our 100 Acts of Kindness campaign as we celebrated 100 years of
commitment to the global diabetes community. These acts included community service, educational workshops,
charitable donations and personal gestures of kindness, all aligned with our ongoing mission to make life better
for people living with diabetes. In addition, members of our team in Canada memorialized this legacy by laying
a commemorative brick at the Banting House National Historic Site     the    birthplace of insulin        on World
Diabetes Day.
We continued our tradition of inviting advocacy and professional groups to join us on stage to ring the Nasdaq
Closing Bell in recognition of Diabetes Awareness Month in November 2024, this time celebrating the strength,
well-being and individuality of people living with diabetes. We share a common mission and vision
with these organizations, and this event gives them a highly visible platform to raise their
profile among the estimated 537 million people worldwide who are living with
diabetes   , as well as their friends, loved ones and caregivers.
~8 billion
Education is foundational to our mission, and in 2024, our team in Asia
launched emERGE, a diabetes educational program developed in
partnership with Diabetes Singapore and the Association of Diabetes
Educators Singapore. The virtual program, which is available in 11
countries, seeks to enhance the skills and knowledge of healthcare
professionals with the latest insights and best practices in diabetes care.
injection devices
manufactured annually
    Magliano DJ, Boyko EJ; IDF Diabetes Atlas 10th edition scientific
committee. IDF DIABETES ATLAS. 10th edition. Brussels: International
Diabetes Federation; 2021. https://www.ncbi.nlm.nih.gov/books/NBK581934/

Looking ahead to Fiscal 2025
Building on everything that we have accomplished in the last
two and a half years, our focus now moves to the next phase
of embecta   s transformation back to growth, guided by three
key strategic priorities:
Strengthening the business: In addition to continuing to
deepen our relationships with our customers, we will begin to
execute a comprehensive brand transition plan, starting with North
America in Fiscal 2025.
~2,000
employees
worldwide
Expanding our product portfolio: We will work to identify new areas to
expand our reach and increase our impact, leveraging our core strengths in our
global commercial channel and in high-volume, high-quality manufacturing.
Increasing financial flexibility: We are committed to our goal of refining our processes, eliminating
inefficiencies, and optimizing every aspect of our operations to ensure we remain lean, agile, and ready to adapt.
By reducing net leverage and debt, we intend to create a stronger financial base that enables us to make future
strategic investments and remain resilient, regardless of market conditions.
We will continue to add to the rich legacy of a 100-year-old business that has made a difference in countless lives.
Our approximately 2,000 employees around the world have accomplished so much in the short time since we
became an independent company, and they are eager to have an even greater impact in the year ahead.
Thank you for being by our side as we continue to advance every day together.
Devdatt (Dev) Kurdikar
President and Chief Executive Officer
LTG (Ret.) David F. Melcher
Non-executive Chairman of the Board



shareholder letter icon 12/19/2024 Letter Continued (Full PDF)
 

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