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Thibaut Mongon, CEO of Kenvue Inc. Inc., a Johnson & Johnson consumer health business, during an interview with CNBC during his company’s IPO on the New York Stock Exchange (NYSE), May 4, 2023.
Brendan McDiarmid | Reuters
Kenvue CEO Thibaut Mongon It is betting on brand and product innovation to drive growth at the newly formed company after its strong public market debut Thursday.
“In the next quarter and, frankly, in the years to come, we’ll continue to do what we do best, which is innovate to find new ways to serve consumers and help them take better care of their health,” Mongon told CNBC. In an interview shortly after Kenvue shares began trading on the New York Stock Exchange.
Shares of the company rose 22% Thursday, closing at $26.90 per share. The stock was hovering around that level in early trading on Friday, giving the company a market value of nearly $50 billion.
Kenvue, out Johnson & Johnsoncarrying a Packed wallet Well-known brands include Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno, and J & J’s baby powder of the same name.
Ten Kenvue brands booked nearly $400 million or more in sales last year, according to a preliminary prospectus The company filed with the Securities and Exchange Commission last week.
But Mongon told CNBC that Kenvue’s family of brands has a “huge opportunity” for growth.
The company’s product innovation plans include new science and technology to develop new products that meet consumers’ specific needs in a way that hasn’t been done before, according to Mongon.
Kenvue has a team of approximately 1,500 research and development professionals who identify new ways to improve a given product.
Mongon believes that product innovation makes Kenvue’s brands “more relevant than ever” to consumers because they better target their needs.
“There is no end to you taking better care of your health and there is no end to us creating products and solutions to help you do that,” Mongon told CNBC.
For example, Mongon pointed to a sunscreen launched under the Neutrogena brand. The company designed the product, Neutrogena Invisibleto blend into skin without creating the chalky, cakey white residue most sunscreens leave behind, eliminating the consumer’s pain point of applying protection.
As a result, Monjon said, this product could reach consumers who may not use traditional sunscreen regularly.
“This is our contribution to the world. To provide these consumers with a solution: powerful sun protection but also great aesthetics,” Monjon said. “This should get more people to use sunscreen on a regular basis, something we know is very important for the skin.”
The company has launched more than 100 new product innovations every year since 2020, according to the company’s prospectus. The company said in its filing that product innovations launched over the past three years accounted for about $1.5 billion in Kenvue net sales.
Monjon said the company will “continue to push the envelope” to launch new products in the coming years.
Brand innovation
Kenvue will use a “digital-first approach” to deliver more personalized experiences with the company’s brands, according to Mongon. This includes new e-commerce and direct-to-consumer services.
The Zyrtec brand, for example, has its own brand Allergy forecast app It’s called “AllergyCast”. Zyrtec is a medication designed to relieve allergy symptoms such as watery eyes, runny nose, sneezing, and itching.
Mongon said Kenvue designed the app to help consumers manage their allergies, allowing them to track their pollen levels and allergy symptoms. The app can eventually predict how severe a consumer’s allergy will be based on their location, weather conditions and history of symptoms.
“You will receive messages that will allow you to better understand and manage your symptoms,” Mongon told CNBC. “This is part of the innovation we focus on at Kenvue.”
Kenvue has also designed a “SmartCheck” The digital otoscope is under the brand Tylenol, which is a medication that reduces fever and treats minor aches and pains.
SmartCheck is an ear scope device and app that turns a smartphone into an otoscope, which is used to look into the ears. The application allows users to take a recording of a potentially injured eardrum and send it to a healthcare provider or telehealth service for diagnosis.
But Kenvey noted in the prospectus that continuing to expand its service and product offerings through “digital initiatives” could expose the company to additional risks, including potential technical failures, cybersecurity incidents, and consumer privacy and data protection concerns.
Mergers and acquisitions are not excluded
When asked about the possibility of M&A, Mongon said Kenvue is primarily focused on organic growth.
But he said the company does not completely rule out mergers and acquisitions in the future.
He noted that Kenuve has a proven track record of identifying appropriate brands in the market that can complement the company’s portfolio in a positive way.
“If we see an opportunity that makes sense strategically and financially, we will move on thanks to the healthy balance sheets that we have,” Mongon said.
Kenvu reported total assets of more than $27 billion as of January 1, on a pro forma basis, excluding the impact of costs associated with the public offering, and total liabilities of nearly $16 billion.
The company had total debt of about $9 billion as of the beginning of the year.
Kenvue had $14.95 billion in sales for 2022 and net income of $1.46 billion on a pro forma basis, according to the preliminary prospectus.
Kenvue is traded under the stock ticker “KVUE”.
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