Thibaut Mongon, CEO of Kenvue Inc. a Johnson & Johnson consumer-health business, speaks during an interview with CNBC during his company’s IPO on the Recent York Stock Exchange (NYSE), May 4, 2023.
Brendan McDermid | Reuters
Kenvue CEO Thibaut Mongon is betting on brand and product innovation to drive growth on the newly spun-out company after its solid debut on the general public market Thursday.
“In the following quarter and albeit, within the years to come back, we’re going to proceed to do what we do best, which is innovating to seek out recent ways to serve consumers and help them take higher care of their health,” Mongon told CNBC in an interview shortly after shares of Kenvue began trading on the Recent York Stock Exchange.
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Shares of the corporate gained 22% Thursday to shut at $26.90 per share. The stock hovered around that level in early trading Friday, giving the corporate a market value of roughly $50 billion.
Kenvue, spun out of Johnson & Johnson, carries a packed portfolio of widely known brands, similar to Band-Aid, Tylenol, Listerine, Neutrogena, Aveeno and J&J’s namesake baby powder.
Ten of Kenvue’s brands booked roughly $400 million or more in sales last yr, in keeping with a preliminary prospectus the corporate filed with the Securities and Exchange Commission last week.
But Mongon told CNBC that Kenvue’s portfolio of brands has “ample opportunity” to grow.
The corporate’s plans for product innovation involve recent science and technologies to develop recent products that meet the precise needs of consumers in a way that hasn’t been done before, in keeping with Mongon.
Kenvue has a team of around 1,500 research and development professionals who discover recent ways to reinforce a given product.
Mongon believes product innovation ultimately makes Kenvue’s brands “more relevant than ever” to consumers as they higher goal their needs.
“There isn’t any limit so that you can maintain your health in a greater way and there isn’t any limit for us to invent products and solutions to allow you to try this,” Mongon told CNBC.
For example, Mongon pointed to a sunscreen launched under the Neutrogena brand. The corporate designed the product, Neutrogena Invisible, to mix into the skin without creating the unflattering chalky white residue most sunscreens leave behind, eliminating a consumer pain point for applying the protection.
In consequence, Mongon said, that product could reach consumers who may not repeatedly use traditional sunscreen.
“That is our contribution to the world. To offer these consumers with an answer: Strong sun protection but in addition great aesthetics,” Mongon said. “That ought to make more people use sunscreen regularly, which we all know is so necessary for the skin.”
The corporate has launched greater than 100 recent product innovations annually since 2020, in keeping with the corporate’s prospectus. Product innovations launched throughout the last three years have accounted for around $1.5 billion of Kenvue’s net sales, the corporate said in its filing.
Mongon said the corporate will “keep pushing the envelope” to launch recent products within the upcoming years.
Brand innovation
Kenvue will use a “digital-first approach” to deliver more personalized experiences with the corporate’s brands, in keeping with Mongon. That features recent e-commerce and direct-to-consumer services.
The brand Zyrtec, for instance, has its own allergy forecast app called “AllergyCast.” Zyrtec is a drug designed to alleviate allergy symptoms similar to watery eyes, runny nose, sneezing and itching.
Mongon said Kenvue designed the app to assist consumers manage their allergies, allowing them to trace pollen levels and their allergy symptoms. The app can ultimately predict how severe a given consumer’s allergies will probably be based on their location, weather conditions and symptom history.
“You’ll receive messages that help you understand and manage your symptoms higher,” Mongon told CNBC. “That is a part of the innovation that we give attention to at Kenvue.”
Kenvue also designed the “SmartCheck” digital ear scope under the brand Tylenol, a drugs that reduces fever and treats minor aches and pains.
SmartCheck is a private ear scope device and app that turns a smartphone into an otoscope, which is used to look into ears. The app allows users to take a recording of a toddler’s potentially infected eardrum and send it to a healthcare provider or telehealth service for diagnosis.
But Kenvue noted within the preliminary prospectus that continuing to expand service and product offerings through “digital initiatives” may expose the corporate to additional risks, including potential technical failures, cybersecurity incidents and consumer privacy and data protection concerns.
M&A is not ruled out
When asked concerning the potential for mergers and acquisitions, Mongon said Kenvue is primarily focused on organic growth.
But he said the corporate is not completely ruling out M&A in the long run.
He noted that Kenuve has a powerful track record of identifying the appropriate brands available in the market that might complement the corporate’s portfolio in a positive way.
“If we see a possibility that is sensible strategically and financially we are going to move because of the healthy balance sheets that we’ve,” Mongon said.
Kenvu recorded total assets of greater than $27 billion as of Jan. 1, on a professional forma basis, excluding the impact of the prices related to the general public offering, and total liabilities of roughly $16 billion.
The corporate recorded total debt of around $9 billion as of the beginning of the yr.
Kenvue raked in $14.95 billion in sales for 2022 and a net income of $1.46 billion on a professional forma basis, in keeping with the preliminary prospectus.
Kenvue trades under the stock ticker “KVUE.”