Baxter International Inc. · NYSE:BAX
Baxter International — Merger or Acquisition (January 2023)
23 slides from Baxter International's merger presentation, Jan 6, 2023
Slide 1: Baxter Investor Announcement
BAXTER INVESTOR ANNOUNCEMENT January 6, 2023 1
Slide 2: Today's Speakers
T O D AY ’ S S P E A K E R S José (Joe) E. Almeida James (Jay) Saccaro Chairman, President and Executive Vice President and Chief Executive Officer Chief Financial Officer 2
Slide 3: Forward-Looking Statements
F O R WA R D - L O O K I N G S TAT E M E N T S This presentation includes forward-looking statements concerning the company's financial results and business development, transformation and regulatory activities (including the proposed spinoff of the company’s Renal Care and Acute Therapies businesse
Slide 4: Baxter's Value Creation Pillars Guide Strategic Priorities
B A X T E R ’ S VA L U E C R E AT I O N P I L L A R S G U I D E S T R AT E G I C P R I O R I T I E S Innovation Market Operational Capital Expansion Efficiency Allocation Advance connected care Execute revenue synergies Deliver cost synergies Evaluate further strategic technological solutions Pursue
Slide 5: Today's Announcement
T O D AY ’ S A N N O U N C E M E N T Renal Care and Acute Therapies to Initiating plans to simplify Baxter’s spin off into a standalone, leading operating model to drive strategic global healthcare company clarity, improve end-to-end operational efficiencies, and accelerate growth • Pursuing strateg
Slide 6: Baxter's Transformation Journey
B A X T E R ’ S T R A N S F O R M AT I O N J O U R N E Y 2016–2017: 2018–2021: 2022: A Fresh Start Building the Foundation Accelerating TODAY: Transformation Realigned structure to Refined corporate strategy Unlocking innovation drive innovation across the care Bolstered organic continuum through Up
Slide 7: Challenges Faced and Steps Being Taken
C H A L L E N G E S FA C E D A N D S T E P S B E I N G TA K E N Challenges faced Steps being taken Highly diverse product Executing set of portfolio moves to portfolio challenging drive strategic clarity and focus resource allocations capital allocation into innovation and commercial Inefficiencies
Slide 8: Establishing Two Leading Healthcare Companies
E S TA B L I S H I N G T W O L E A D I N G H E A LT H C A R E C O M PA N I E S , W I T H S H A R E D H E R I TA G E O F S AV I N G A N D S U S TA I N I N G L I V E S KidneyCo Global innovator in kidney Healthcare leader focused on care delivering value for providing an array of medical patients thro
Slide 9: Spin Positions Both Businesses to Drive Additional Shareholder Value
SPIN POSITIONS BOTH BUSINESSES TO DRIVE ADDITIONAL S H A R E H O L D E R VA L U E KidneyCo Baxter Renal-focused healthcare company with Leading medtech company with broad portfolio leading product portfolio, history of innovation of core therapy and connected care offerings and broad geographic foot
Slide 10: KidneyCo Includes Robust Portfolio within Durable Renal Segments
K I D N E YC O I N C L U D E S R O B U S T P O R T F O L I O W I T H I N D U R A B L E RENAL SEGMENTS FY’21 Sales1 Current Portfolio2 ’22 – ’25 Peritoneal $2.8B Ecosystem 3-4% expected market growth rate3 60% of total Dialysis sales Market growth driven by: PD Cyclers & Solutions MyPD Patient App An
Slide 11: KidneyCo Will Continue to Drive Patient-Focused Innovation with Strong R&D Pipeline
K I D N E YC O W I L L C O N T I N U E T O D R I V E PAT I E N T - F O C U S E D I N N O VAT I O N WITH STRONG R&D PIPELINE1 Near Term Launches2 Future Launches Sharesource Analytics Next-gen Global APD Cycler Data visualization to help clinicians Lower total cost of therapy in order proactively man
Slide 12: KidneyCo Has Clear, Well-Defined Strategic Objectives
K I D N E YC O H A S C L E A R , W E L L - D E F I N E D S T R AT E G I C O B J E C T I V E S Key Strategic Objectives > Increase PD therapy penetration globally Peritoneal > Deliver additional connected care solutions Dialysis > Advance new technologies to simplify therapy and drive greater adoptio
Slide 13: Spin Expected to Accelerate Value Creation Potential
S P I N E X P E C T E D T O A C C E L E R AT E VA L U E C R E AT I O N P O T E N T I A L • Increase PD and HDx therapy penetration in existing geographies • Drive CRRT portfolio expansion in the U.S. and Commercial geographic expansion in emerging markets Enhance value creation • Accelerate R&D inve
Slide 14: Transaction Overview and Next Steps
TRANSACTION OVERVIEW AND NEXT STEPS • Baxter expects to spin off its Renal Care and Acute Therapies business units into a new independent, publicly traded company (“KidneyCo”) • Spinoff expected to be structured as a tax-free distribution of newly issued shares of KidneyCo common stock to Baxter sha
Slide 15: Portfolio Actions Coupled with Simplified Operating Model Enhance Value Creation
P O R T F O L I O A C T I O N S C O U P L E D W I T H S I M P L I F I E D O P E R AT I N G M O D E L E N H A N C E B A X T E R ’ S VA L U E C R E AT I O N P O T E N T I A L • Streamline portfolio and commercial structure to fulfill Baxter’s vision • Accelerate commercial investments to further penet
Slide 16: Baxter to Maintain a Leadership Presence within Established Markets
B A X T E R T O M A I N TA I N A L E A D E R S H I P P R E S E N C E W I T H I N E S TA B L I S H E D M A R K E T S FY’21 Sales Current Portfolio1 Pharma / $3.0B ’22 – ’25 ~3% Fill-finish Norepinephrine Doxil Suprane Sevoflurane BPS 28% of total MFG expected market sales growth rate3 Medication $2.9
Slide 17: Baxter on Track to Deliver Differentiated Product Innovations
B A X T E R O N T R A C K T O D E L I V E R D I F F E R E N T I AT E D P R O D U C T I N N O VAT I O N S 1 Near Term Launches2 Future Launches Pharma / 25+ Additional Products Installation of new vial Propofol (US) Across drug delivery, complex BPS formulations, and vial products & prefilled syringe
Slide 18: Baxter Focused on Broadening Presence Across the Care Continuum
BAXTER WILL CONTINUE TO BE FOCUSED ON BROADENING PRESENCE ACROSS THE CARE CONTINUUM Hospital Home Alternate Care Care Site Care Emergency, Surgical, Med Primary Care, Ambulatory Surg, Critical Care, Acute & Chronic Home Surgery Centers, Immediate Pharmacy, Care Comms Care Care, Outpatient Cardiology
Slide 19: Optimizing Manufacturing and Supply Chain to Enhance Network Efficiencies
O P T I M I Z I N G M A N U FA C T U R I N G A N D S U P P LY C H A I N T O E N H A N C E NET WORK EFFICIENCIES Manufacturing footprint network optimization • In Region/For Region manufacturing & fulfillment (make where you sell; buy where you make mindset) • Manufacturing & distribution network rat
Slide 20: Actions Will Further Accelerate Disciplined Capital Allocation Strategy
T H E S E A C T I O N S W I L L F U R T H E R A C C E L E R AT E O U R D I S C I P L I N E D C A P I TA L A L L O C AT I O N S T R AT E GY PORTFOLIO SHARE MANAGEMENT DEBT REPAYMENT DIVIDENDS REPURCHASES Currently pursuing strategic Utilizing proceeds from Maintaining Dividends Expecting to reinstate
Slide 21: Continuing Momentum In and Beyond
C O N T I N U I N G M O M E N T U M I N 2 0 2 3 A N D B E YO N D ► Proposed KidneyCo spinoff to create two leading healthcare companies with robust product portfolios ► Simplified operating model expected to enable greater strategic clarity and faster decision making ► Disentanglement of manufacturi
Slide 22: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 22
Slide 23: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This presentation includes the company’s unaudited 2021 pro forma net sales as if its acquisition of Hillrom and proposed spinoff of its Renal Care and Acute Therapies businesses had occurred as of January 1, 2021. It also includes unaudited 2021 pro forma net sales for t
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