Baxter International Inc. · NYSE:BAX
Baxter International — Q1 2021 Earnings Presentation
38 slides from Baxter International's earnings presentation, Apr 29, 2021
Slide 1: First-Quarter 2021 Earnings
First-Quarter 2021 Earnings Baxter International Inc. April 29, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements concerning Baxter’s financial results, business development activities, capital structure, cost savings initiatives, R&D pipeline, including results of clinical trials and planned product launches, and outlook for secon
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures To supplement Baxter’s consolidated financial statements presented on a U.S. GAAP basis, the Company discloses certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United S
Slide 4: Top Quartile Goals / Our Strategy
Top Quartile Goals Patient safety and Quality Best place to work Growth through innovation Industry leading performance Our Strategy Strengthen our portfolio and extend our impact through transformative innovation that spans prevention to recovery 4
Slide 5: Table of Contents
Table of Contents Performance Summary 6 Financial Results 11 2021 Outlook 17 Non-GAAP Reconciliations 20 Selected Historical Financials 29
Slide 6: Performance Highlights First-Quarter 2021
Performance Highlights First-Quarter 2021 $2.9B +5% Reported +1% Constant Currency1 Sales +1% Operational2 Key Metrics U.S. GAAP Adjusted3 Gross Margin 38.9% 42.0% YOY Change (260 bps) (230 bps) Operating Margin 13.2% 17.0% YOY Change (140 bps) (180 bps) Diluted EPS $0.58 $0.76 YOY Change (9%) (7%)
Slide 7: Executing On Our Strategy
Executing On Our Strategy Recent Highlights Demonstrating Underlying Portfolio Resilience In Dynamic Environment 1 ▪ Delivered 1% operational sales growth in Q1 2021, driven by underlying business strength, ongoing demand for medically essential products and sales relating to contracted services for
Slide 8: Key Financial Metrics
Key Financial Metrics First-Quarter 2021 Snapshot1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS $2.8B $2.9B 18.8% 17.0% $0.82 $0.76 +1% Operational Growth 2 (180bps) (7%) Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 1 Non-GAAP financial metrics referenced in this slide inc
Slide 9: First-Quarter 2021 Performance
First-Quarter 2021 Performance1 Metric Q1 2021 Q1 2021 Guidance Actual Sales Growth ~3% +5% Reported Sales Growth LSD Decline +1% Constant Currency Sales Growth LSD Decline +1% Operational Adjusted Diluted EPS $0.63 - $0.65 $0.76 Growth vs. Prior-Year Period (23%) – (21%) (7%) Solid Operational Grow
Slide 10: Demonstrating Portfolio Resiliency Amid COVID-19
Demonstrating Portfolio Resiliency Amid COVID-19 First-Quarter 2021 Business Drivers1 Product Category Sales CC Growth2 Quarterly Performance Drivers Strong performance driven by global growth in PD business; continue to Renal Care $922M +2% monitor the impact of excess mortality among ESRD patients
Slide 11: Financial Results
Financial Results First-Quarter 2021 Earnings April 29, 2021 11
Slide 12: First-Quarter 2021 Sales By Product Category
First-Quarter 2021 Sales By Product Category1 Q1 2021 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Operational Renal Care $216 $706 $922 +6% +2% +2% Medication Delivery $411 $241 $652 (4%) (6%) (6%) Pharmaceuticals $200 $352 $552 +7% +1% (2%) Clinical Nutrition $83 $
Slide 13: First-Quarter 2021 Sales By Operating Segment
First-Quarter 2021 Sales By Operating Segment1 Q1 2021 Revenue Total Growth $ In Millions Reported Reported Constant Operational Americas $1,560 (0%) (1%) (1%) (North and South America) EMEA (Europe, Middle East and $738 +7% 0% (1%) Africa) APAC $648 +18% +8% +8% (Asia Pacific) Total Baxter $2,946 +
Slide 14: First-Quarter 2021 Adjusted Financial Results
First-Quarter 2021 Adjusted Financial Results1 Q1 2020 Q1 2021 Change Adjusted Gross Margin 44.3% 42.0% (230 bps) Adjusted SG&A Expense 21.1% 20.7% (40 bps) (% of Sales) Adjusted R&D Expense 4.4% 4.3% (10 bps) (% of Sales) Adjusted Operating Margin 18.8% 17.0% (180 bps) Adjusted Diluted EPS $0.82 $0
Slide 15: Maintaining Focus On Cash Flow Generation
Maintaining Focus On Cash Flow Generation1 Operating Cash Flow2 Capital Expenditures Free Cash Flow3 $377M $274M $206M $172M $171M $102M Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 1 Non-GAAP financial metrics referenced in this slide include free cash flow. A reconciliation to comparable U.S. G
Slide 16: Prioritizing Financial Flexibility While Driving Value For Shareholders
Prioritizing Financial Flexibility While Driving Value For Shareholders Over The Long-Term Reinvestment In Business Meeting the needs of patients and providers globally while continuing to invest in long-term innovation and an accelerated launch cadence Dividend Issuance Announced a quarterly divide
Slide 17: 2021 Outlook
2021 Outlook First-Quarter 2021 Earnings April 29, 2021 17
Slide 18: Full-Year 2021 Guidance
Full-Year 2021 Guidance1 FY 2021 Guidance Sales Growth 8% - 9% Reported Foreign Exchange (~300 bps) Sales Growth 5% - 6% Constant Currency OUS Caelyx and Doxil (~100 bps) Sales Growth 4% - 5% Operational GAAP Diluted EPS $2.85 - $2.93 Growth vs. Prior-Year Period 34% - 38% Adjusted Diluted EPS $3.47
Slide 19: Second-Quarter 2021 Guidance
Second-Quarter 2021 Guidance1 Q2 2021 Guidance Sales Growth 14% - 15% Reported Foreign Exchange (~600 bps) Sales Growth 8% - 9% Constant Currency OUS Caelyx and Doxil (~100 bps) Sales Growth 7% - 8% Operational GAAP Diluted EPS $0.54 - $0.57 Growth vs. Prior-Year Period 13% – 19% Adjusted Diluted EP
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations First-Quarter 2021 Earnings April 29, 2021 20
Slide 21: Non-GAAP Reconciliation as of April 29, 2021
Non-GAAP Reconciliation as of April 29, 2021 Non-GAAP Reconciliations: As part of its Q1 2021 earnings announcement on April 29, 2021, Baxter presented its financial results for the first quarter of 2021. Baxter also presented guidance for Q2 2021 and FY 2021. In these presentations, Baxter used non
Slide 22: Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Three Months Ended March 31, 2021 and 2020 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended March 31, 2021 included special items which impacted t
Slide 23: Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Three Months Ended March 31, 2021 and 2020 (unaudited) 1 The company’s results in 2021 and 2020 included intangible asset amortization expense of $64 million ($52 million, or $0.10 per diluted share, on an after-tax basi
Slide 24: Reconciliation of Operating Cash Flow to Free Cash Flow
Reconciliation of Non-GAAP Financial Measure Operating Cash Flow to Free Cash Flow (unaudited) (in millions) Three M onths Ended M arch 3 1 , 2021 2020 C ash flow s from operations - continuing operations $377 $274 Capital expenditures (171) (172) F ree cash flow - continuing operations $206 $102 Fr
Slide 25: Reconciliation of Net Sales Growth As Reported to Operational
Reconciliation of Non-GAAP Financial Measure Change in Net Sales Growth As Reported to Operational Sales Growth From The Three Months Ended March 31, 2020 to The Three Months Ended March 31, 2021 (unaudited) Sales By Product Category: N et Sales Grow th C aelyx and Operational As Reported Dox il FX
Slide 26: Adjusted SG&A Expense and Adjusted R&D Expense
Adjusted Selling, General and Administrative Expense and Adjusted Research and Development Expense From The Three Months Ended March 31, 2020 to The Three Months Ended March 31, 2021 (unaudited) On Page 22, the U.S. GAAP selling, general and administrative (SG&A) expense has been reconciled to the a
Slide 27: Projected Sales Growth and Operating Margin Reconciliation
Reconciliation of Non-GAAP Financial Measure Projected Second Quarter and Full Year 2021 U.S. GAAP Sales Growth to Projected Operational Sales Growth, and Projected Full Year 2021 U.S. GAAP Operating Margin to Projected Adjusted Operating Margin (unaudited) Sales Growth Guidance Q2 2021* FY 2021* Sa
Slide 28: Projected Tax Rate and Earnings Per Share Reconciliation
Reconciliation of Non-GAAP Financial Measure Projected Full Year 2021 U.S. GAAP Tax Rate to Projected Adjusted Tax Rate, and Projected Second Quarter and Full Year 2021 U.S. GAAP Earnings Per Share to Projected Adjusted Earnings Per Share (unaudited) The projected FY 2021 U.S. GAAP tax rate of appro
Slide 29: Selected Historical Financials
Selected Historical Financials First-Quarter 2021 Earnings April 29, 2021 29
Slide 30: 2018-2020 Recast of Historical Segment and Product Category Financial Information
2018-2020 Recast of Certain Historical Segment and Product Category Financial Information The Company has included the following slides to recast certain previously reported financial information to conform with cer tain geographic segment reporting and product category (previously referred to as Gl
Slide 31: Sales By Operating Segment
Sales By Operating Segment1 1 Non-GAAP financial metrics referenced in this slide include constant currency sales growth. A reconciliation to comparable U.S. GAAP measures can be found herein and is available at www.baxter.com. 31
Slide 32: Sales By Operating Segment
Sales By Operating Segment1 1 Non-GAAP financial metrics referenced in this slide include constant currency sales growth. A reconciliation to comparable U.S. GAAP measures can be found herein and is available at www.baxter.com. 32
Slide 33: Operating Income By Operating Segment
Operating Income By Operating Segment 33
Slide 34: Operating Income By Operating Segment
Operating Income By Operating Segment 34
Slide 35: Sales By Product Category
Sales By Product Category1 1 Non-GAAP financial metrics referenced in this slide include constant currency sales growth. A reconciliation to comparable U.S. GAAP measures can be found herein and is available at www.baxter.com. 35
Slide 36: Sales By Product Category
Sales By Product Category1 1 Non-GAAP financial metrics referenced in this slide include constant currency sales growth. A reconciliation to comparable U.S. GAAP measures can be found herein and is available at www.baxter.com. 36
Slide 37: Sales By Product Category
Sales By Product Category1 1 Non-GAAP financial metrics referenced in this slide include constant currency sales growth. A reconciliation to comparable U.S. GAAP measures can be found herein and is available at www.baxter.com. 37
Slide 38: First-Quarter 2021 Earnings
First-Quarter 2021 Earnings Baxter International Inc. April 29, 2021