Baxter International Inc. · NYSE:BAX
Baxter International — Q3 2024 Earnings Presentation
45 slides from Baxter International's earnings presentation, Nov 8, 2024
Slide 1: Third-Quarter 2024 Earnings
T H I R D - Q UA R T E R 2 0 24 E A R N I N G S Baxter International Inc. November 8, 2024 1
Slide 2: Forward-Looking Statements
FO RWA R D - LO 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 (including the outlook for fourth-quarter and full-year 2024, and full-year 2025) and business development and regulatory activities. These forward-looking sta
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: Table of Contents
TA B L E O F C O N T E N T S Performance Summary 5 Financial Results 14 2024 Outlook 22 Non-GAAP Reconciliations 27 4
Slide 5: Performance Summary
P E R FO R M A N C E S U M M A RY Third-Quarter 2024 Earnings November 8, 2024 5
Slide 6: Executing on Our Strategy for Value Creation
E X E C U T I N G O N O U R S T R AT E GY FO R VA LU E C R E AT I O N RECENT HIGHLIGHTS Q3 2024 Results1 Excluding Q3 2023 BioPharma Solutions sales and including sales of Kidney Care in both periods, worldwide Baxter sales grew 4% on both a reported and constant currency basis, in line with the c
Slide 7: Performance Highlights
P E R FO R M A N C E H I G H L I G H T S C O N T I N U I N G O P E R AT I O N S 1 Third-Quarter 2024 Year-To-Date 2024 $2.7B +4% Reported +4% Constant Currency2 $7.9B +3% Reported +3% Constant Currency2 Sales Sales Key Metrics GAAP Adjusted3 Key Metrics GAAP Adjusted3 Gross Margin 38.3% 43.7% Gross
Slide 8: Key Financial Metrics: Third-Quarter Snapshot
KEY FINANCIAL METRICS T H I R D - Q U A R T E R 2 0 2 4 S N A P S H O T ( C O N T I N U I N G O P E R AT I O N S ) 1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS $2.7B 15.4% $0.49 $2.6B 14.5% $0.43 +4% Constant Growth 2 (90 bps) +14% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3
Slide 9: Key Financial Metrics: Year-to-Date Snapshot
KEY FINANCIAL METRICS Y E A R - T O - D AT E 2 0 2 4 S N A P S H O T ( C O N T I N U I N G O P E R AT I O N S ) 1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS $7.6 B $7.9 B 13.8% $1.31 13.4% $1.05 +3% Constant Growth 2 (40 bps) +25% YTD 2023 YTD 2024 YTD 2023 YTD 2024 YTD 202
Slide 10: Third-Quarter Adjusted Financial Results
T H I R D - Q UA R T E R 2 0 24 A DJ U S T E D F I N A N C I A L R E S U LT S 1 ( C O N T I N U I N G O P E R AT I O N S ) Q3 2023 Q3 2024 Change Adjusted Gross Margin 44.8% 43.7% (110 bps) Adjusted SG&A Expense 24.4% 24.6% +20 bps (% of Sales) Adjusted R&D Expense 5.0% 4.8% (20 bps) (% of Sales) Ad
Slide 11: Third-Quarter Performance vs Guidance
T H I R D - Q UA R T E R 2 0 24 P E R FO R M A N C E 1 ( I N C L U D I N G D I S C O N T I N U E D O P E R AT I O N S ) 2 Metric Q3 2024 Q3 2024 Guidance Actual Sales Growth 3% - 4% +4% Reported Sales Growth 4% - 5% +4% Constant Currency GAAP Diluted EPS N/A $0.27 Growth vs. Prior-Year Period +200%
Slide 12: Year-to-Date Adjusted Financial Results
Y E A R -TO - DAT E 2 0 24 A DJ U S T E D F I N A N C I A L R E S U LT S 1 ( C O N T I N U I N G O P E R AT I O N S ) YTD 2023 YTD 2024 Change Adjusted Gross Margin 44.3% 43.2% (110 bps) Adjusted SG&A Expense 25.6% 25.1% (50 bps) (% of Sales) Adjusted R&D Expense 5.0% 4.8% (20 bps) (% of Sales) Adju
Slide 13: Portfolio Management Actions and Capital Allocation Strategy
E X E C U T I N G P O R T FO L I O M A N AG E M E N T AC T I O N S TO AC C E L E R AT E D I S C I P L I N E D C A P I TA L A L LO C AT I O N S T R AT E GY PORTFOLIO SHARE MANAGEMENT DEBT REPAYMENT DIVIDENDS REPURCHASES Disciplined portfolio Taking actions towards achieving Continued commitment to re
Slide 14: Financial Results by Operating Segment
F I N A N C I A L R E S U LT S BY O P E R AT I N G S E G M E N T Third-Quarter 2024 Earnings November 8, 2024 14
Slide 15: Third-Quarter Sales by Product Category
T H I R D - Q UA R T E R 2 0 24 S A L E S BY P RO D U C T C AT E G O RY 1 Q3 2024 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Infusion Therapies & Technologies $613 $457 $1,070 +7% +7% Advanced Surgery $149 $123 $272 +7% +7% Medical Products & Therapies $762 $580 $1
Slide 16: Year-to-Date Sales by Product Category
Y E A R -TO - DAT E 2 0 24 S A L E S BY P RO D U C T C AT E G O RY 1 YTD 2024 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Infusion Therapies & Technologies $1,718 $1,363 $3,081 +6% +6% Advanced Surgery $446 $366 $812 +5% +6% Medical Products & Therapies $2,164 $1,72
Slide 17: Third-Quarter Business Drivers
T H I R D - Q UA R T E R 2 0 24 B U S I N E S S D R I V E R S 1 Product Category Sales CC Growth2 Quarterly Performance Drivers Sales in the quarter benefited from significant growth for the U.S. infusions systems portfolio as the rollout of Infusion Therapies & the Novum IQ pump platform continues
Slide 18: Third-Quarter Segment Results
T H I R D - Q UA R T E R 2 0 24 S E G M E N T R E S U LT S Q3 2024 Results1 Segment Segment Reported Reported Constant Operating Operating YoY Margin $ In Millions Revenue Growth Growth Income Margin Change2 Medical Products & Therapies $1,342 +7% +7% $268 20.0% +50 bps Healthcare Systems & $752 +1%
Slide 19: Year-to-Date Segment Results
Y E A R -TO - DAT E 2 0 24 S E G M E N T R E S U LT S YTD 2024 Results1 Segment Segment Reported Reported Constant Operating Operating YoY Margin $ In Millions Revenue Growth Growth Income Margin Change2 Medical Products & Therapies $3,893 +5% +6% $733 18.8% (30 bps) Healthcare Systems & $2,167 (2%)
Slide 20: Third-Quarter and Year-to-Date Results
T H I R D - Q UA R T E R A N D Y E A R -TO - DAT E 2 0 24 R E S U LT S 1 Q3 2024 Results Adjusted Adjusted Reported Reported Constant Operating Operating YoY Margin $ In Millions Revenue Growth Growth Income Margin Change2 Baxter Continuing Operations $2,699 +4% +4% $391 14.5% (90 bps) Total Baxter
Slide 21: Stranded Costs Post Kidney Care Presentation
S T R A N D E D C O S T S P O S T K I D N E Y C A R E ( D O ) P R E S E N TAT I O N 1 , 2 Full Year Quarterly Stranded Costs Stranded Costs Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 FY 2023 Adjusted Operating $65 $82 $49 $70 $69 $88 $78 $304 Income Adjusted Earnings $0.10 $0.13 $0.07 $
Slide 22: 2024 Outlook
2 0 24 O U T LO O K Third-Quarter 2024 Earnings November 8, 2024 22
Slide 23: Fourth-Quarter Guidance
FO U R T H - Q UA R T E R 2 0 24 G U I DA N C E 1 Q4 2024 Guidance Sales Growth Decline LSD2 Reported (Continuing Operations) Foreign Exchange <50 bps Sales Growth Decline LSD2 Constant Currency (Continuing Operations) Adjusted Diluted EPS $0.50 - $0.53 Continuing Operations Adjusted Diluted EPS $0.
Slide 24: Full-Year Guidance
F U L L -Y E A R 2 0 24 G U I DA N C E 1 FY 2024 Guidance Sales Growth ~2% Reported (Continuing Operations) Foreign Exchange <50 bps Sales Growth ~2% Constant Currency (Continuing Operations) Adjusted Diluted EPS $1.81 - $1.84 Continuing Operations Adjusted Diluted EPS $1.09 - $1.10 Discontinued Ope
Slide 25: Full-Year Guidance by Segment
F U L L -Y E A R 2 0 24 G U I DA N C E BY S E G M E N T 1 Sales Growth FY 2024 Constant Currency Guidance Medical Products & Therapies 2% - 3% Healthcare Systems & Technologies Decline LSD2 Pharmaceuticals ~7% Baxter (Continuing Operations) ~2% Kidney Care (DO)3 ~2% Total Baxter ~2% 1Non-GAAP financ
Slide 26: New Baxter Preliminary Financial Outlook
N E W B A X T E R P R E L I M I N A RY F I N A N C I A L O U T LO O K 1 FY 2025 Guidance Operational Sales Growth 4% - 5% Constant Currency (Continuing Operations) Annually Adjusted Operating Margin ~16.5% in 2025 (Continuing Operations) Increasing Annually Thereafter 1Non-GAAP financial metrics ref
Slide 27: Non-GAAP Reconciliations
NON-GAAP R E C O N C I L I AT I O N S Third-Quarter 2024 Earnings November 8, 2024 27
Slide 28: Non-GAAP Reconciliations as of November 8, 2024
NON-GAAP RECONCILIATIONS AS OF NOVEMBER 8, 2024 Non-GAAP Reconciliations: As part of its Q3 2024 earnings announcement on November 8, 2024, Baxter presented its financial results for the third quarter of 2024. Baxter also presented guidance for the fourth quarter and full year of 2024. In these pres
Slide 29: Reconciliations: Three Months Ended September 30, 2024
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Three Months Ended September 30, 2024 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended September 30, 2024 included special items which impacted t
Slide 30: Reconciliations: Three Months Ended September 30, 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Three Months Ended September 30, 2023 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended September 30, 2023 included special items which impacted t
Slide 31: Description of Adjustments: Three Months 2024 and 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Three Months Ended September 30, 2024 and 2023 (unaudited) 1. The company’s results in 2024 and 2023 included costs related to programs to optimize its organization and cost structure. The company's results of continuin
Slide 32: Reconciliations Including Discontinued Operations: Q3 2024
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Including Discontinued Operations1 Three Months Ended September 30, 2024 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended September 30, 2024 incl
Slide 33: Reconciliations Including Discontinued Operations: Q3 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Including Discontinued Operations1 Three Months Ended September 30, 2023 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended September 30, 2023 incl
Slide 34: Reconciliations: Nine Months Ended September 30, 2024
DESCRIPTIONS OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Nine Months Ended September 30, 2024 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the nine months ended September 30, 2024 included special items which impacted th
Slide 35: Reconciliations: Nine Months Ended September 30, 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Nine Months Ended September 30, 2023 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the nine months ended September 30, 2023 included special items which impacted the
Slide 36: Description of Adjustments: Nine Months 2024 and 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Nine Months Ended September 30, 2024 and 2023 (unaudited) 1. The company’s results in 2024 and 2023 included costs related to programs to optimize its organization and cost structure. The company's results of continuing
Slide 37: Reconciliations Including Discontinued Operations: Nine Months 2024
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Including Discontinued Operations1 Nine Months Ended September 30, 2024 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the nine months ended September 30, 2024 includ
Slide 38: Reconciliations Including Discontinued Operations: Nine Months 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Including Discontinued Operations1 Nine Months Ended September 30, 2023 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the nine months ended September 30, 2023 includ
Slide 39: Non-GAAP Financial Measures: Twelve Months Ended December 31, 2023
NON-GAAP FINANCIAL MEASURES Twelve Months Ended December 31, 2023 (unaudited) (in millions, except for percentage data) 1 Adjusted operating margin and adjusted earnings per share are non-GAAP measures. For a reconciliation of the U.S. GAAP operating margin - Continuing Operations to the adjusted op
Slide 40: Net Sales Growth to Constant Currency: Three Months
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Change in Net Sales Growth As Reported to Constant Currency Sales Growth From The Three Months Ended September 30, 2023 to The Three Months Ended September 30, 2024 (unaudited) Sales By Product Category: 1 The company's BPS business was sold in the third
Slide 41: Net Sales Growth to Constant Currency: Nine Months
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Change in Net Sales Growth As Reported to Constant Currency Sales Growth From The Nine Months Ended September 30, 2023 to The Nine Months Ended September 30, 2024 (unaudited) Sales By Product Category: *Totals may not add across due to rounding Change in
Slide 42: Projected 2024 Sales Growth to Constant Currency
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Projected Fourth Quarter and Full Year 2024 U.S. GAAP Sales Growth to Projected Constant Currency Sales Growth and Full Year 2024 U.S. GAAP Sales Growth to Projected Constant Currency Sales Growth by Segment (unaudited) 42 *Totals may not foot due to roun
Slide 43: Projected 2024 Operating Margin, Tax Rate and EPS
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Projected Full Year 2024 Projected Adjusted Operating Margin, Projected Full Year 2024 Projected Adjusted Tax Rate and Projected Fourth Quarter and Full Year 2024 Projected Adjusted Earnings Per Share (unaudited) Baxter calculates forward-looking non-GAAP
Slide 44: Projected Operational Sales Growth and 2025 Operating Margin
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Projected Annual Operational Sales Growth and Projected Full Year 2025 Projected Adjusted Operating Margin (unaudited) Baxter calculates forward-looking non-GAAP financial measures based on forecasts that omit certain amounts that would be included in GAA
Slide 45: Third-Quarter 2024 Earnings
T H I R D - Q UA R T E R 2 0 24 E A R N I N G S Baxter International Inc. November 8, 2024 45