Solventum Corporation · NYSE:SOLV
Solventum — Q1 2024 Earnings Presentation
15 slides from Solventum's earnings presentation, May 9, 2024
Slide 1: Q1 FY24 earnings presentation
Q1 FY24 earnings presentation May 9, 2024 © Solventum 2024. All rights reserved.
Slide 2: Forward-looking statements and use of document
Forward-looking statements and use of document Forward-looking statements This presentation contains forward-looking information about Solventum's financial results and estimates and business prospects that involve substantial risks and uncertainties. In particular, statements regarding the future p
Slide 3: Executive summary
Executive summary Completed spin-off from 3M and began trading on April 1 Q1 financial summary: • Net sales of $2.0B (+0.9%) - Annualized benefit of 2023 pricing actions partially offset by lower volumes - Includes timing benefit of P&F customer orders • Adjusted operating income reflects pricing ac
Slide 4: Q1 FY24 Financial summary
Q1 FY24 Financial summary Segment Sales Sales by geography Dental Solutions MedSurg $335M International -1.8% Reported $1,119M $900M +0.4% Organic -0.4% Reported -0.9% Reported +0.1% Organic +0.7% Organic Health Total Solventum Information Systems U.S. $317M $2,016M $1,116M +0.3% Reported +1.2% Repo
Slide 5: MedSurg summary
MedSurg summary Q1 financial results Q1 FY24 Q1 FY23 Y/Y Reported -0.4% Net sales $1,119M $1,123M Organic +0.1% Segment drivers: • Organic growth driven by positive pricing, largely offset by lower volumes • Volume declines in advanced wound dressing and sterilization assurance product categories 3M
Slide 6: Dental Solutions summary
Dental Solutions summary Q1 financial results Q1 FY24 Q1 FY23 Y/Y Reported -1.8% Net sales $335M $341M Organic +0.4% Segment drivers: • Organic growth driven by positive pricing, largely offset by lower volumes • Volume declines in traditional orthodontics products 3M RelyX Universal Resin Cement •
Slide 7: Health Information Systems summary
Health Information Systems summary Q1 financial results Q1 FY24 Q1 FY23 Y/Y Reported +0.3% Net sales $317M $316M Organic +0.3% Segment drivers: • Organic growth driven by revenue cycle management solutions business, led by 3MTM 360 EncompassTM system, largely offset by declines in clinician producti
Slide 8: Purification & Filtration summary
Purification & Filtration summary Q1 financial results Q1 FY24 Q1 FY23 Y/Y Reported +6.1% Net sales $245M $231M Organic +6.7% Segment drivers: • Organic growth fueled by higher volume growth in both bioprocessing filtration and membrane OEM product categories • Bioprocessing filtration benefitted fr
Slide 9: Reaffirming FY24 guidance
Reaffirming FY24 guidance Additional considerations: Organic sales growth -2% to 0% • Pricing: Expect waning benefit for remainder of 2024 and a return to a normalized pricing environment • SKU rationalization project: Expected to begin impacting financials in 2H 2024 and carry into 2025-26 Adjusted
Slide 10: Focused on strategic and disciplined capital allocation
Focused on strategic and disciplined capital allocation Pay down debt Consistent with maintaining investment grade ratings Priority for first ~24 months • Maintain strong liquidity position with existing cash and revolving credit facility post transaction close • Builds financial flexibility with mo
Slide 11: Appendix
Appendix © Solventum 2024. All rights reserved. 11
Slide 12: Non-GAAP financial measures
Non-GAAP financial measures In addition to reporting financial results in accordance with U.S. GAAP, Solventum also provides non-GAAP measures that we use, and plan to continue using, when monitoring and evaluating operating performance and measuring cash available to invest in our business. The adj
Slide 13: Q1 FY24 detailed non-GAAP reconciliation and free cash flow
Q1 FY24 detailed non-GAAP reconciliation and free cash flow Spin-off & separation- Legal entity (Millions, except per share data) Q1 FY24 GAAP Amortization Restructuring Q1 FY24 non-GAAP related costs restructuring Net sales 2,016 2,016 Cost of sales1 844 (1) 843 Gross margin 1,172 1 1,173 R&D 195 (
Slide 14: Q1 FY23 detailed non-GAAP reconciliation and free cash flow
Q1 FY23 detailed non-GAAP reconciliation and free cash flow (Millions) Q1 FY23 GAAP Amortization Restructuring Q1 FY23 non-GAAP Net sales 2,011 2,011 Cost of sales1 874 (1) 873 Gross margin 1,137 1 1,138 R&D 195 (43) 152 % of sales 9.7% 7.6% SG&A 577 (49) (8) 520 % of sales 28.7% 25.9% Operating inc
Slide 15: Glossary and definitions
Glossary and definitions Organic sales growth Abbreviation Elaboration Total net sales less the impacts of foreign currency and sales from business acquisitions or divestitures for the first 12 months post-transaction EPS Earnings per share Adjusted operating income FCF Free cash flow Operating inco