Great. Well, good afternoon, everyone. Thanks so much for joining us for our first afternoon session. My name is Nathan Rich. I cover the generic pharma space for Goldman Sachs. Very pleased to have Viatris up here with us. I'll just do some quick introductions, and then we can jump into the Q&A. To my right, Scott Smith, the new Chief Executive Officer. In the center, Rajeev Malik, President, and Sanjiv Narula, CFO. Thank you guys for joining us. Really appreciate you being here.
Thank you.
Great. Well, Scott, new to the company, so you joined the board in December, became CEO in April. Can you maybe just talk about what attracted you to Viatris and what your initial impressions of the company have been so far?
What attracted me, I got a call last summer from Rob Coury, who asked me where I was and what I was doing, and could I come to meet him in Midtown Manhattan and to have a discussion because they were looking to refresh some positions on the board and do some things? I said, "Absolutely." I went to Midtown and met with him. That discussion, which I assumed was gonna be 15, 20 minutes, half an hour introduction to the company, ended up being four and a half hours. The amount of energy, enthusiasm, and passion that he had for the company was just something incredible that I'd never seen from somebody on the board before.
I remember leaving that meeting and going home, talking to my wife and saying: I'd love to be involved with this company one way or the other, right? Whether on the board or something else. That was my first impression. Then as I've come in as a board member, and then as the CEO, I have more of that same impression from everybody, right? There's tremendous engagement, tremendous passion, tremendous enthusiasm for the company. Really is a very, very engaged employee base, and there's 37,000 people in the company, so it's not always easy to get that level of engagement. Whether we've traveled to China or Japan or met people on, you know, on Zoom, it's just that level of enthusiasm has been there. The other thing is, that's first impression, is just how solid the company is right now.
Most people, when they're coming into a CEO job as an outsider, there's been a problem, something's happened, there's major issues, a need for change in the strategic plan, a need to change people. None of that here. Very solid company in very good position, rock solid balance sheet, good cash flows, predictable, robust. I think there's just an amazing opportunity to take this company from where it is into phase two of the strategic plan and execute and really return this company to significant growth. You know, to me, that's the excitement and the opportunity for me.
Great. I guess, you know, maybe for people who aren't as familiar, could you maybe talk about your background and maybe the best ways to kind of leverage kind of your past experience here?
I have, yeah, maybe a different background than a lot of people, but one that I think is perfect for where I am at Viatris. You know, I'm a pharmacologist by training. I started off in the science part of the business. I did an MBA. I then got involved in big pharma with the Upjohn Company, Pharmacia & Upjohn Pfizer, different iterations of that company. I went and morphed into BioAtla Spec Pharm Company, sorry, Biovail Spec Pharm Company, where I ran sort of the global commercial operations, then to Celgene, where I was the founder of the immunology division and eventually, president and COO of the company, and then to a small biotech company.
I met a guy who had an amazing idea, and I wanted to go in and help him build a company and help get it funded. That's a company called BioAtla, took that company, got it funded, raised about half a billion dollars, got it through IPO, and it's out in public and doing well. Sort of a combination of, you know, sort of the big pharma, big biotech experience, where there's a lot of cash and what do you do with cash? The biotech experience, where they're very much cash starved, right?
The combination of being involved in those two ends, I think, puts me in a unique position to run the company, but understand, you know, what opportunities are out there from a business development perspective, what the struggles are of the biopharma world. I think my experience base is very diverse. I've also geographically lived all over the world and worked all over the world. I've lived and worked in Hong Kong and China and Belgium and Switzerland, in the United States and Canada and Paris. I've had an opportunity to do international business across the world. You know, given that Viatris is a company that operates in 165 countries, that international experience I think is important for me as well.
The company's, you know, closing out phase one, going into phase two of its long-term strategy. You know, what do you want to see the business deliver over the next six months as you kind of get ready to, you know, position the business to hopefully achieve its phase two targets?
I think very, very simple. We want to focus, and we want to execute, and we want to deliver the quarters, and then we can go from there. You know, for me, it's just the company's set up very well. There is a history in the, you know, since Viatris was formed, nine quarters of very solid performance. I wanna continue that or accelerate that. We expect to see revenue growth as we move into the second half of the year and for the full year. Just really focusing and executing and making sure we deliver on our commitments for this year, and then we can work into phase two of the plan.
I guess lastly, and then, you know, I want to get into some of the, you know, maybe more detailed strategic questions, but at a high level, I guess, you know, what's your vision for kind of the type of company you want investors to view Viatris as? You know, if you're thinking about, you know, how to pitch this to shareholders.
Scale, diversity, both geographic diversity and therapeutic diversity, a company which has a strong strategic plan, a very strong, predictable cash flows, and a capital allocation plan that I think will be, you know, very, very solid. Once we get and pay down our ratios, debt ratios to 3, which we should be very close to, we're gonna look to be able to return to shareholders of the cash flow that we have left, which should be probably a minimum of $2.3 billion in 2024. Pay half of that back to shareholders in terms of share buybacks and dividends, and use the other half to enhance the portfolio through business development. Business development, for me, is more than just M&A. It's also licensing, partnering, investing in the internal pipeline.
Taking our free cash flow and giving some back to shareholders through the mechanisms that I said, and investing in growth on the other side, that's to me, the value proposition of this company and the investment hypothesis.
Awesome. Thanks a lot for that overview. I guess, you know, kind of getting into some of the more detailed questions. Divestitures has been on the top of a lot of investors' minds. You know, you got kind of laid out towards the end of last year, kind of the plan for the divestitures. You know, how have talks progressed since then? You know, I think you kind of have talked about announcing at least one in the, you know, first half of, or the early part of the second half of this year. Do you kind of feel like you're still on a pace to kind of get those, you know, four divestitures completed or announced by the end of the year?
Things remain on track from what we said on the Q1 call. We hope and are working towards and expect to announce all the divestitures by the end of the year. We would hope to be in a position to announce one in the second half of the year, relatively early in the second half of the year as we move forward. Exactly what we laid out in terms of the Q1 call. Having said that, everything's on track. These are matters of strategic choice. We do not need to divest these businesses. These are good businesses. They're doing very well. They're performing very well. We're choosing to divest them to help us accelerate into phase two of the strategic plan.
It will allow us to really focus on the core of the business that we want to grow going forward. We're not in any kind of, there's no fire sale here. We're going thoughtfully. There's lots of companies who are interested in these assets. We want to make sure we get the appropriate value for them, but we don't need to do these divestitures to make our financial commitments as we move forward here. Again, a matter of strategic choice. To answer your first question, we remain on track. I don't know, Raju, if you've got any other context.
No, I think you're very well at it, and these are well-performing businesses. We have a lot of interest, and we remain on track. You know, one, definitely in the, probably in the Q3. The rest of them in the year as we proceed, before the end of the year.
Obviously the goal would be to come together on the valuation, but you know, you're not tied to doing these divestitures if for some reason you can't, you know, find an attractive offer?
Yeah, I don't think we're going to sell these at some sort of discount.
Yeah.
These are active negotiations. I will say there's lots of interest in these assets. They're very well-performing assets. I think we'll be able to get the value that we expect out of them. You never know until deals close.
Yeah.
You know, nothing's closed at this point in time, but I feel like they're on the right track and within the valuation range that we would expect.
Oh, yeah, otherwise, we'll happily keep and continue to leverage the EBITDA of these businesses. They are great businesses.
Yeah.
You know, it was, we just decided like this because we wanted to reshape the company and focus on where we need to take the company. Some of these were considered to be nice to have, not must have.
Yeah.
The, the European OTC business is the biggest of the planned ones?
Yeah.
Got it. Okay. Then, Sanjiv, can you maybe remind us on the use of proceeds? Obviously, it'll depend on the magnitude of the proceeds that you get, but just, you know, under the current plan, how you plan to use these funds?
Sure. First of all, as Scott pointed out, this is a matter of strategic choice.
Yeah.
We're not doing to get the proceeds to pay down our debt or meet our financial commitments. We can do that without the all the divestitures, whether it's the maturity this year or the maturity next year, on our dividend commitment for this year or for the next year. We can do that without that. Now, clearly, as we do the divestitures, that gets accelerated. The plan is, as we laid out very clearly, we want to get down to 3 x leverage target, which is the standing commitment we've gotten it to maintain our investment grade rating. We will get there, with or without, but hopefully with the divestitures as quickly as possible.
Once we get there, we pivot to a more balanced capital allocation, which is what we said about that is, that will be 50% of the cash flow that is remaining, going back to our shareholders in form of dividend and share buyback, and the other 50% will go back to business development. The other thing that I'd like to mention, once we get down to 3 x, meets that threshold for us, we'll operate within a range, which is 2-3, because you got a business to run, and you cannot see the opportunities you can get, whether it's the business development or share buybacks, we'll operate within that range, just to kind of manage the going forward business.
Okay.
net-net, the divestitures don't change your business strategy.
Yeah.
They just allow us to accelerate it by some months.
Okay, makes sense. The pro forma number that you gave, I think $2.3 billion of free cash flow is a 4. Is there an EBITDA tied to that? I think, you know, you had talked in the past about like $4.5 billion-$5 billion. Is that the rough range?
Yeah. We obviously, Nate, we're not giving guidance.
Okay.
What we said is kind of like a target. If you think about it, take out all the divestments that we plan to execute on that, take that out. The remaining company's cash flow will be at minimum, $2.3 billion for 2024, with before any divestment cost and the taxes, right? That obviously gets funded by the divestment business. That's kind of what we talked about. Now, without giving guidance, I've seen kind of the numbers being floated. If you take that, you can get to a number of, you know, $4.6 billion-$4.9 billion on EBITDA, but that's kind of the number that's been.
... sales that have floated around, but again, we're not kind of giving guidance on that.
From a kind of growth standpoint, I think you've talked about eye care, obviously. GI and derm are the other areas of focus. You closed the two eye care deals earlier this year. I guess, how should we think about the pace of business development in these areas? I mean, do you feel like with Oyster Point and Famy, you kind of have the foundation that you need, and you'll kind of try to grow that? Are there other acquisitions in the eye care space that you would potentially be looking to do?
I definitely think we want to continue to build a franchise in eye care. The same thing that we want to do in GI and in derm. I think, you know, the eye care strategy is a good proxy for what we want to do in the other therapeutic areas, which there we acquired a customer-facing team with an approved asset and then also acquired other assets that were in development. We have 3,000 people in development in the company that can help leverage and accelerate some of those development programs. If there's good assets in the eye care space, we'll continue to build that franchise. We're going to do the same sort of thing in GI and in derm, maybe a company with a lead asset and add some.
You know, I would also say it's important that when we're talking about business development, we're not necessarily just talking about M&A.
Yeah.
Right? M&A is one way to go. There can be risks, it can be binary, but, you know, there's ways to supplement anything you're doing from an M&A perspective, including licensing, partnering, et cetera. We have a very, very strong, particularly commercial organization around the world, a great distribution network around the world, great development and research resources across the world that are focused on mainly, you know, clinical development. You know, being able to leverage and utilize that backbone that we have around the world is very, very important. We could be taking assets from smaller companies in the U.S. that don't have the structure or the money to be able to commercialize globally. Those would be great assets for us to put in.
In the countries that we're operating in, there may be companies that have assets that they can't think about global commercialization. I think it's a combination of things that we're going to build these franchises, again, potentially through some M&A, potentially through some licensing deals, either globally or regionally. There's some partnering things that we can do, again, globally or regionally. Then just looking for assets to put into the overall infrastructure that we have in place.
I guess, what's your philosophy on the degree of clinical risk you'd be willing to take as you look to do these BD activities?
I think we want to stay out of the phase one, phase two game. I think we would be willing to take some risk on a phase three asset that was close to the line, that had some interim data or had final data, that they were getting ready to submit to the FDA. That sort of risk profile, where it's not 100%, but it's pretty close to commercialization, we would definitely consider, as well as, of course, commercialized assets. I don't think we want to start to get into phase one projects, which will yield assets, you know, 9, 10, 11 years from now, and those are very binary risks there. You know, relatively de-risked phase three assets and beyond is what we're really looking at.
I don't know if you want to.
Yeah, 100%. Maybe the last one on this topic, and then we can move on. You know, when you think about GI and Derm, you know, do you kind of see how eye care plays out, you know, how successful you are before maybe taking bigger steps into those other spaces? Can you kind of, you know, progress these three different areas in parallel?
I definitely think we can progress in parallel. It's important to note that the eye care acquisitions closed this year, right?
Right. Yeah.
We're sort of still integrating them in. We don't have maximum leverage yet. We, you know, we'll look to see, you know, the trajectory of those eye care assets, particularly Tyrvaya, as we get into the second half of the year, and where that goes. We should be able to leverage the infrastructure we have from a distribution, access, commercial perspective. Also, being able to have the capital to start to move into things like DTC and other things. We should see the effect of that leverage as we get into the second half 2023 and 2024. We're not going to wait to, you know, execute the strategy on other fronts. We're very confident that we can be able to do that.
Great. I guess, as we think about the phase two period, you know, let's put the divestitures aside for a second. I guess, what are the other, I guess, guideposts or milestones that you're looking for over the next, you know, like 12 to 18 months, to kind of, you know, as an indication that the business is kind of on track to deliver those longer term targets? You know, I think 3% revenue growth, I think it's 4%-5% EBITDA growth and then stronger EPS growth. You know, how should investors kind of track the progress, you know, against that, maybe outside of the typical quarterly earnings?
I mean, maybe this is too simplistic an answer, but I think just, you know, how we're executing on a quarter to quarter to quarter basis. Taking a look at that, we want to get our leverage ratio down to 3.0. When we're in that place, I think we feel confident that we can really start to move, you know, into phase II of where our strategic plan is. And we, you know, we've got a very good, talented group of people. We may need to add some skill sets as we really move into phase II, if we get into GI, derm, and other things. We've got a very, very good group of people that we can leverage as we move in.
We feel very confident, based on the stability of the business, to be able to move into phase II as quickly as we can.
Great. Rajiv, maybe to tie you in here. Can you walk us through the kind of step-down in base business erosion that you guys anticipate over the next several years? You know, what's the driver of that? I guess, you know, when we maybe think about the North America and European Generics business, you know, have you seen any changes there that would maybe indicate a more stable environment than what we've seen in the past several years?
You know, I think the business, this business has never been this strong, I would say. Having said that, one, we have much better understand now, you know, a couple of years later, what we have got to work with. One important part of, you know, modeling as 4% or 5% erosion at the beginning was the erosion of the brands, and we have seen a much better performance of those branded portfolio over the last 9 quarters. That's about 1%-2%. That's basically adding another 200 basis points of improvement to the base erosion. If you put that, now underlying this is the segment's performance. China was, when we started, was in a bucket of risk. China has been hitting on all cylinders for our business.
Team has performed very well, you know, last quarter, this business, again, you know, for last several quarters, this business has been performing strongly and even showed some growth over there. You know, Europe has been steady for last 9 quarters, growing 3%-4%. One of the reason is the just mix of this business, 70% brands, 30% generics. Even generics in Europe, you know, erosion, price erosion of the European generic business is not more than 1%-2%. We have enough launches to offset and give us low to mid-single digit growth. Emerging markets, you know, once we take out the volatility of the COVID and ARV business, have been hitting on all cylinders. The branded business in that segment has been growing at mid-single digit.
The only market where we have not been able to little bit reverse the, you know, trend of this, decline is Japan, just because it's heavily impacted by the government-regulated, mandated price cuts in the beginning of the year. Now, coming back to the USA, I think, for first time after in the several last years, the dialogue is changing. Changing from price, price to supply, supply. We're gonna see a little bit more of that as we move into the second half of the year, as industry gears up for the serialization track and trace, I think supply is going to be one focus. That has rendered in a sort of phase of stability.
For us, we have moved away from that volatile bucket of the commodity generics, which is only now about, you know, our overall generics is about 11%. Our portfolio is heavily tilted towards more complex products. I think for us, that volatility is a little bit behind us, as I would say. We are excited. You know, the performance of the products like Abevmy, Ryzumvi, or, you know, generic over the last few years, and now looking forward to launch of the Symbicort and so many other complex injectables into this portfolio, gives us the confidence that this business is set up for sustainable, coming back to the growth in the North America.
You know, the pressure in the complex generic portfolio in the quarter, I think, was more challenging. Can you maybe just explain? I think it had to do with competition coming in on Rexulti and Zytiga. Can you maybe, you know, just kind of explain how that plays out? You know, are we at a level where maybe pricing stabilizes? Obviously, you have to kind of you know, get through that.
It's going to be, it's always a little bit ongoing. You know.
Yeah
A generic, its pricing dynamics, are always there going to be some challenge.
Yeah.
It's the profile, the algorithm is completely different. Now, for example, Abevmy was launched in 2019. It's the fourth year, it is still a very meaningful contributor to the business. Yes, it declined as some competition comes in, but we factor it very much upfront. It's exactly performing how we expected. We model competition, for example... There are upsides also, like we modeled a couple of competitors in this year. If they don't show up, there can be upside to that in the same. I think it's how this business is modeled. Q1 was because the status last year, we had a exclusive position over there. Second, Zytiga and, you know, Zytiga, we saw the Amneal coming back in during the last year.
There were a couple of reasons why we had the Q1, you know, complex category showed that slide.
Overall, the business performance, if you look at the top line, is exactly in line with our expectations.
Okay.
With all the pushes and pulls that we talked about, because, you know, with a diversified portfolio, you can always have those kind of situations, but it performed well, and we are expecting that to perform in line with our expectation. That's why we reinforced our guidance on a full year basis and come to the midpoint of the, on the top line and then EBITDA as well.
Where our expectation may be a slightly different mix than.
Yeah.
anticipated, but that's when you have.
Well,
kind of geographic.
Right.
Portfolio diversity is normal with this, right?
This business is not dependent on any one product or any one market or any one launch, I would say. We have so many different levers, rest has come to how you manage those levers.
Got it. Okay. I had a couple of specific product questions. First, maybe the monthly GA. I guess, you know, as you're thinking about potentially launching next year, can you maybe discuss your ability, you know, to shift the market from, you know, the kind of current product to the monthly product that you're going to have?
Look, you know, when we started developing it, the question was, can we develop and, you know, once a month and all that?
Yeah.
I think first of all, phase III data is so positive and so good. You know, the product, the GA is a great molecule. First of all, it's, perhaps one of the product which has been tested for a number of years and has withstood that time. It's very safe, very tolerable, much, you know, requires much less monitoring than many other, you know, products. Moreover, I think this product, now, you know, of course, there are compliance benefits from one, you know, 14 injections in a month to one injection, almost 500 mg to just 40 mg of the drug. There are multiple, in fact, the data suggests that the, you know, just the EDSS score, this product has performed much better than even the conventional GA.
one, yes, there's a GA, you know, almost there are about 100,000 patients in USA which are on GA. one, of course, that, of course, we are talking enzyme, and at the moment, like for any brand launch, we are engaging into all sort of work which we need to do, whether it's segmenting the SCPs, the patient population, whether it's a medical benefit versus a pharmacy benefit, engaging the peer research. We are, you know, building the plan, engaging the KOLs and the, you know, ad board. I think as we go along, we are very, very confident about this product. this, for this is going to be a global opportunity. It's going to be a meaningful product for USA, and it's also going to be a meaningful product for Europe.
what would be the timeline around Europe?
Europe will be about, I would say, the U.S. launch will be next year.
Yeah.
Late in the second half, and Europe will be about six months later.
Okay.
Nine months. Six to nine months later. Yeah.
Okay. wanted to maybe move on to Tyrvaya. I guess, you know, pretty modest contribution in the first half. You guys have been talking about it being more 4Q weighted. you know, obviously, you've seen coverage build, you're gonna do some marketing. I guess, how do you think about the maybe the magnitude of inflection in 2024 relative to 2023? You know, you also have full ownership now, so you may be more in control over the go-to-market strategy. Can you just talk about the plans there?
Yeah, I think, you know, again, and something that I mentioned earlier, it's important to note that that deal just closed this year.
Yeah.
We're just, you know, starting to really figure out the leverage points, see how we can help. You know, the revenues to this point in time are in line with our expectations were going forward, so everything's going well. Yeah, I think, you know, new specialty launches in the U.S. can be complicated. It can take a few quarters to get the right access pieces in place, get the right support staff in place. I think we're in a position where now that we're here, we can help, we can leverage, we got the capital to be able to really invest in this business. I think you're going to see very significant inflection starting in the second half of this year and, of course, into 2024. Do you want any more context?
One of the reasons for that inflection is the investment, which is going to go into this right now, second half. We are switching on the DTC in the second half. We are switching on spending a lot on the digital marketing, because this segment is very DTC segment. We're going to see inflection from 2023 to 2024, assuming 2021. I think we are confident and excited to see that. It's early signs, both of, you know, Scott talked about the access, the coverage, all that is in place now. It's about execution on these segments.
Got it. I think eye care, in general, is supposed to be a billion-dollar franchise.
Yeah.
over this phase II period. How do we get there? You know, I'd assume it's kind of, you need something beyond just Tyrvaya.
Yeah.
As you think about, you know, the building blocks to that $1 billion.
Absolutely, without question. you know, we've been talking about billion-dollar franchise between now and 2028.
Yeah.
I think is what we talked about. It's, I'm not sure, seven, eight products in development?
Yeah. It's a combination of Tyrvaya and five other programs which we have already shared with you. It's going to be a combination that almost 60% of this $1 billion is going to come from the dry eye, Rest of the 40% is the other molecules. If you want to take another cut into this, maybe two-thirds will be the USA, one-third will be the rest of the world.
Okay.
We're feeling good about our ability to deliver on that $1 billion.
Yeah.
you know, between now and 2028, given all the programs that we have there.
Okay, great. Maybe Symbicort, then we can maybe zoom out high level to margins and free cash flow after that. Maybe just wrapping up the product discussion with Symbicort. I mean; I guess you're preparing for a launch later this year. I guess, you know, how are you thinking about kind of, you know, what that's going to look like? Is it something that could be similar to, like an Advair type of launch in terms of, you know, what you maybe see, you know, over the next one to two years?
Very excited. We're looking forward to launching it in very near future. In fact, not later this year, but in.
Yeah.
We are all set to launch that, 1. Second, you're absolutely right. Looking into an algorithm of Advair, because it's a very similar setup. Advair had a brand, GSK had a brand, and then they had a Prasco as an AG. This is a similar setup over here. You have a brand, and you have an AG already set up. Yes, modeling something close to Advair is perhaps the right way to do it.
Okay, got it. I guess maybe margins, since you've. I guess, you know, you discussed some, you know, I guess, one-time favorability last quarter that won't repeat. I guess, how do we think about margins over the balance of the year? Then if you could tie that into kind of what you see as the algorithm over the phase II period, because you have, you know, EBITDA growing 100, 200 basis points faster than revenue. Where does that leverage come from?
Sure, sure. This year, quarter one gross margin was 60% ahead of our expectations.
Couple of things that went on, just we talked about it at the call. First was the product portfolio, and the segment mix was in our favor. You know, China did well. If that happens, gross margin comes out better. We had a little bit delayed impact of some of the inflationary impact. We had inventory built at a lower cost that we were able to consume, so that could have follow up. We had some other impact, and product like lenalidomide helps the gross margin. What I'm anticipating, quarter to gross margin will go down for the same reasons, like, you know, the portfolio mix is and some of the 1x will not repeat in the second. Inflation will catch up, which is anticipated, will catch up.
It's going to moderate and then moderate for the rest second half of the year. Overall, for the full year, we expect gross margin within our target range around 58%. As we go forward into second phase II of our strategy, I expect that gross margin will stabilize. You know, clearly, some of the base business erosion will be there, pricing impact will be there, but as we go moving up the value chain, things like Tyrvaya, the gross margin is very high, over and above our company averages. As we go higher, gross margin will stabilize from that perspective. That's kind of one thing that we should expect. Second thing, what we talked about in terms of SG&A, SG&A will step down in absolute terms because a lot of these the divestments.
As a percentage of revenue, if you were just to look at it, as the revenue goes up, it probably stay the same. The percentage will moderate but heightens towards the later part of phase II. R&D, we're expecting to about roughly around 6% on a medium to long-term basis. That obviously will provide us the operating leverage as we go forward, and that will result into the cash flow, which will again, be very sustainable, strong and growing cash flow as we go forward.
Maybe just to wrap up here in the couple of minutes we have left. you know, you've also talked about EPS growth in the double digits, you know, I think as high as mid-teens. I guess, one, what do you think it will take to kind of shift the investor lens from EBITDA work, which has been the focus historically, to maybe more appreciative of the EPS growth story? Then, two, how should we think about... Because it seems like you'll be kind of close to your target leverage by the end of this year. Is more capital devoted to buybacks, and is that what drives the EPS growth?
Absolutely. Clearly, it's not a question of if, it's a question of when. I think the point is, as soon as the divestitures flush through the system and we get to our 3x , we are intention is to pivot to a EPS-based company. A couple of things are going to happen. One is the organic income growth that gonna drive as we continue to move up the value chain and that drive the top line growth. Then as we implement our balanced capital allocation and start buying back shares, both will drive the EPS growth that we talked about.
Yeah. Great.
Yeah, you have to get the growth before you have a real EPS story, right?
Yeah.
The combination of that top line growth with share buybacks, Sanjiv was saying, can help us really accelerate.
That you can grow the business that drives cash flow and then use that to buy back shares. Great. We're just about out of time. Thanks very much for your time today, and thanks to everyone for joining.
Thank you.
Thank you.
Thank you.
Great. Thanks, guys. Appreciate it.