Becton, Dickinson and Company · NYSE:BDX
Becton, Dickinson and — Q3 FY2014 Earnings Presentation
33 slides from Becton, Dickinson and's earnings presentation, Jul 31, 2014
Slide 1: Third Quarter Results Fiscal Year 2014
Third Quarter Results Fiscal Year 2014 July 31, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements These materials include forward-looking statements and it’s possible that actual results could differ from our expectations. Factors that could cause such differences appear in our third quarter earnings release and in our recent SEC filings. Non-GAAP Financial Measures
Slide 3: Executive Overview
Executive Overview Vincent A. Forlenza Chairman, CEO and President 3
Slide 4: Business Highlights
Business Highlights Our consistent, solid third quarter performance demonstrates that our strategy remains sound in this dynamic healthcare environment Strong core product growth coupled with acquisitions performing in-line with expectations Diagnostics’ international growth was partially offs
Slide 5: FY 2014 Financial Highlights
FY 2014 Financial Highlights Third Quarter Year-to-Date FXN FXN $ Growth % $ Growth % Growth % Growth % Revenues $2,157 5.1% 4.6% $6,244 4.9% 5.4% EPS $1.65 12.2% 10.9% $4.47 6.2% 10.0% Adjusted $1.68 9.1% 7.8% $4.57 6.8% 10.5% EPS 5
Slide 6: Financial Update
Financial Update Christopher Reidy Chief Financial Officer and Executive Vice President of Administration 6
Slide 7: Q3 FY 2014 Financial Highlights
Q3 FY 2014 Financial Highlights Solid third quarter results with all segments contributing to growth Results partially impacted by a timing of orders, as expected Pricing was about flat in the quarter Repurchased $187 million of common stock, bringing our year-to-date total repurchases to $4
Slide 8: FY 2014 Revenues by Segment
FY 2014 Revenues by Segment Third Quarter Year-to-Date Reported FXN Reported FXN $ $ Growth % Growth% Growth % Growth% Total Revenues $2,157 5.1% 4.6% $6,244 4.9% 5.4% Medical 1,201 5.3% 4.7% 3,381 6.1% 6.4% Diagnostics 679 3.7% 3.7% 2,005 2.0% 3.0% Biosciences 277 7.7% 6.6% 858 7.1% 7.6% 8
Slide 9: FY 2014 U.S. and International Revenues
FY 2014 U.S. and International Revenues Third Quarter Year-to-Date Reported FXN Reported FXN $ $ Growth % Growth % Growth % Growth % U.S. $871 2.8% 2.8% $2,546 1.8% 1.8% Medical 468 4.4% 4.4% 1,344 4.4% 4.4% Diagnostics 310 -0.2% -0.2% 932 -2.2% -2.2% Biosciences 93 5.1% 5.1% 270 3.2% 3.2% Internati
Slide 10: Emerging Markets
Emerging Markets Emerging Markets financial highlights for FY 2014: FXN Growth % % of BD Revenues Q3 8.9% 24.6% Strong year-to-date Emerging Market growth of 12.0% Robust third quarter growth in key markets and platforms (FXN) China 20.9% Emerging Markets Safety 18.0% Note: Emerging market
Slide 11: FY 2014 Safety Revenues
FY 2014 Safety Revenues Third Quarter Year-to-Date Reported FXN Reported FXN $ $ Growth % Growth % Growth % Growth % Total Safety $569 5.8% 6.1% $1,657 6.0% 6.9% By Geography U.S. 304 1.2% 1.2% 906 3.1% 3.1% International 265 11.6% 12.4% 751 9.7% 11.9% By Segment Medical 284 6.1% 6.6% 832 7.2% 8.3%
Slide 12: Q3 FY 2014 Gross Margin Change
Q3 FY 2014 Gross Margin Change Year-Over-Year -0.1% 52% 0.1% -0.2% % of Revenue Performance: 51% ReLoCo, Pension, Continuous Improvement 51.6% +80 bps 51.5% Mix, Raw Materials, Start-up Costs -100 bps -0.2% 50% Q3 FY 2013 Currency Performance Q3 FY 2014 $1,060 $1,111 12
Slide 13: Q3 FY 2014 Income Statement
Q3 FY 2014 Income Statement Favorable (Unfavorable) Adjusted Q3 Adjusted Q3 FXN % FY 2014 FY 2013 $ Change % Change Change Revenues $2,157 $2,053 $104 5.1% 4.6% Gross Profit 1,111 1,060 51 4.8% 4.1% % of Revenues 51.5% 51.6% SSG&A 528 512 (16) -3.1% -3.4% % of Revenues 24.5% 25.0% R&D 128 121 (7) -5
Slide 14: YTD June FY 2014 Income Statement
YTD June FY 2014 Income Statement Favorable (Unfavorable) Adjusted Adjusted Adjusted YTD YTD $ % FXN % July Guidance(1) FY 2014 FY 2013 Change Change Change Revenues(2) 6,244 5,953 290 4.9% 5.4% 4.5% to 5.0% Gross Profit 3,198 3,084 114 3.7% 5.4% % of Revenues 51.2% 51.8% 51.2% to 51.4%* SSG&A 1,573
Slide 15: FY 2014 Revenue Guidance
FY 2014 Revenue Guidance FXN Growth % Year-to-Date Total Year Total BD 5.4% 4.5% to 5.0% Medical 6.4% 5.5% to 6.0% Diagnostics 3.0% 3.0% to 3.5% Biosciences 7.6% 4.0% to 5.0% 15
Slide 16: Executive Overview
Executive Overview Vincent A. Forlenza Chairman, CEO and President 16
Slide 17: Program and Product Launch Updates
Program and Product Launch Updates Medical Program/Product Planned Launch Date TM BD Simplist Prefilled Injectables • Morphine Sulfate Injection, USP • Launched • 4 additional drugs filed for FDA approval • FY 2014 / FY 2015 Biosciences Program/Product Planned Launch Date BD FACSPresto TM • Launched
Slide 18: Program and Product Launch Updates
Program and Product Launch Updates Diagnostics Program/Product Planned Launch Date BD Veritor System TM • Strep A, RSV • Launched WW BD MAX TM • Staph SR, MRSA XT • Launched WW • Enteric Bacteria New • Launched WW (Launched U.S. Q3) • Enteric Parasite New • Launched EU / Q2 FY 2015 U.S. • GC/CT and
Slide 19: Key Takeaways
Key Takeaways Delivered solid third quarter and year-to-date results Our strategy remains sound in today’s dynamic healthcare environment Continued success with key growth drivers Reaffirming BDX revenue growth and EPS guidance ranges Committed to delivering value to customers and sharehol
Slide 20: Q&A
Q&A BD, BD Logo and all other trademarks are the property of Becton, Dickinson and Company. 20
Slide 21: Q3 FY 2014 Revenue Growth
Q3 FY 2014 Revenue Growth Year-Over-Year 5.1% -0.7% 2,200 0.5% -1.0% 2,100 4.6% $ in Millions 2,000 1,900 $2,053 $2,157 $1,922 1,800 1,700 Q3 FY 2013 Performance Currency Q3 FY 2014 21
Slide 22: Q3 FY 2014 Adjustment Reconciliation
Q3 FY 2014 Adjustment Reconciliation (Unaudited; Amounts in millions, except per share data) Three Months Ended June 30, Program Litigation Reported Termination Adjusted Reported Settlement Adjusted Adjusted FY 2014 Charge (1) FY 2014 FY 2013 Charge (2) FY 2013 % Growth REVENUES $ 2,157 - $ 2,157 $
Slide 23: Q3 FY 2014 Reconciliation – FX Impact
Q3 FY 2014 Reconciliation – FX Impact (Unaudited; Amounts in millions, except per share data) Three Months Ended June 30, Adjusted Foreign Adjusted Adjusted Growth Currency FXN FXN FY 2014 FY 2013 $ Translation Change Growth REVENUES $ 2,157 $ 2,053 $ 104 $ 9 $ 95 4.6% Gross Profit 1,111 1,060 51 7
Slide 24: Q3 FY 2014 Reconciliation of Non-GAAP Financial Measures
Q3 FY 2014 Reconciliation of Non-GAAP Financial Measures (Unaudited) Three Months Ended June 30, Foreign Foreign Foreign Currency Currency Currency Neutral Growth Neutral 2014 2013 Growth Translation Change % Growth % Reported Diluted Earnings per Share from Continuing Operations $ 1.65 $ 1.47 $ 0.1
Slide 25: FY 2014 Reconciliation - FX Impact Emerging Markets and China
FY 2014 Reconciliation - FX Impact Emerging Markets and China (Unaudited; Amounts in millions) Three Months Ended June 30, % Change 2014 2013 Reported FXN FX Impact Total Emerging Markets Revenues $ 530 $ 506 4.9% 8.9% -4.0% Total Emerging Markets Safety Revenues $ 121 $ 108 12.7% 18.0% -5.3% China
Slide 26: YTD June FY 2014 Revenue Growth
YTD June FY 2014 Revenue Growth Year-Over-Year 4.9% $ in Millions - 0.5% 6,200 5.4% 5,800 $5,953 $6,244 5,400 5,000 Q3 FY 2013 Performance Currency Q3 FY 2014 26
Slide 27: YTD June FY 2014 Gross Margin Change
YTD June FY 2014 Gross Margin Change Year-Over-Year -0.6% $ in Millions 52% -0.6% 0.0% Performance: 51% 51.8% ReLoCo, Pension, Continuous Improvement, Pricing +90 bps 51.2% Mix, Raw Materials, Start-up Costs -90 bps 50% Q3 FY 2013 Currency Performance Q3 FY 2014 $3,084 $3,198 27
Slide 28: YTD June 2014 Adjustment Reconciliation
YTD June 2014 Adjustment Reconciliation (Unaudited; Amounts in millions, except per share data) Nine Months Ended June 30, Contract Program Litigation Reported Asset Termination Gain on Termination Adjusted Reported Settlement Adjusted Adjusted FY 2014 Write-Offs Charge (2) Investment (3) Charge (4)
Slide 29: YTD June FY 2014 Reconciliation – FX Impact
YTD June FY 2014 Reconciliation – FX Impact (Unaudited; Amounts in millions, except per share data) Nine Months Ended June 30, Adjusted Foreign Adjusted Adjusted Growth Currency FXN FXN FY 2014 FY 2013 $ Translation Change Growth REVENUES $ 6,244 $ 5,953 $ 290 $ (33) $ 324 5.4% Gross Profit 3,198 3,
Slide 30: YTD June FY 2014 Reconciliation of Non-GAAP Financial Measures
YTD June FY 2014 Reconciliation of Non-GAAP Financial Measures (Unaudited; Amounts in millions) Nine Months Ended June 30, Foreign Foreign Foreign Currency Currency Currency Neutral Neutral 2014 2013 Growth Translation Change Growth % Growth % Reported Operating Income $ 1,204 $ 1,178 $ 27 $ (39) $
Slide 31: YTD June FY 2014 Reconciliation of Non-GAAP Financial Measures
YTD June FY 2014 Reconciliation of Non-GAAP Financial Measures (Unaudited) Nine Months Ended June 30, Foreign Foreign Foreign Currency Currency Currency Neutral Growth Neutral 2014 2013 Growth Translation Change % Growth % Reported Diluted Earnings per Share from Continuing $ 4.47 $ 4.21 $ 0.26 $ (0
Slide 32: FY 2013 Reconciliation
FY 2013 Reconciliation Twelve Months Ended September 30, Pending Litigation Pension Pension Reported Settlement Verdict Settlement Adjusted Reported Settlement Adjusted Adjusted (1) (2) (3) (3) FY 2013 Charge Charge Charge FY 2013 FY 2012 Charge FY 2012 % Growth REVENUES $ 8,054 - - - $ 8,054 $ 7,70
Slide 33: FY 2014 Outlook Reconciliation
FY 2014 Outlook Reconciliation Reported Basis FX Impact FXN Basis Revenues - Full Year 2014 estimated growth 4.0% - 4.5% (0.5%) 4.5% - 5.0% Full Year Full Year 2014 2013 % Increase (estimated) Reported Fully Diluted Earnings per Share from Continuing Operations $ 6.12 - 6.15 $ 4.67 NM Write-off of c
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