Becton, Dickinson and Company · NYSE:BDX
Becton, Dickinson and — Q2 FY2017 Earnings Presentation
32 slides from Becton, Dickinson and's earnings presentation, May 2, 2017
Slide 1: Second Quarter Results Fiscal Year 2017
Second Quarter Results Fiscal Year 2017 May 2, 2017 © 2017 BD. BD, the BD Logo and all other trademarks are property of Becton, Dickinson and Company.
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
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 quarterly earnings release and in our recent SEC filings. Non-GAAP Financial Measures • Th
Slide 3: Executive Overview
Executive Overview Vincent A. Forlenza Chairman and CEO
Slide 4: Accelerating & broadening BD's strategy
Accelerating & broadening BD’s strategy There are clear strategic benefits of a combination: Advances the strategies of both 1 companies and accelerates end-to- end medication management and Better Together: infection prevention A Dynamic and Differentiated Company Creates new growth • ~$16 billion
Slide 5: Q2 FY 2017 Business Highlights
Q2 FY 2017 Business Highlights Strong Q2 and year-to-date performance Second quarter revenue growth driven by both segments and ahead of our expectations Achieved 3.0x gross leverage within two years of CareFusion close, as stated since 2014 Closing of Bard acquisition expected in fall 2017
Slide 6: Financial Update
Financial Update Christopher Reidy Executive Vice President, CFO and CAO
Slide 7: Q2 FY 2017 Financial Highlights
Q2 FY 2017 Financial Highlights Second Quarter Year-to-Date Comparable Comparable FXN FXN $ Growth % FXN $ Growth % FXN Growth% Growth% Growth% Growth% Revenues $2,969 (3.2%) (2.4%) 5.2% $5,892 (2.7%) (2.0%) 5.6% Adjusted $2.30 5.5% 12.8% N/A $4.63 12.1% 16.2% N/A EPS Second quarter revenue growth
Slide 8: FY 2017 Revenues by Segment
FY 2017 Revenues by Segment Second Quarter Year-to-Date Comparable Comparable FXN FXN $ Growth % FXN $ Growth % FXN Growth% Growth% Growth% Growth% Total $2,969 (3.2%) (2.4%) 5.2% $5,892 (2.7%) (2.0%) 5.6% Revenues Medical 1,987 (6.8%) (5.9%) 4.8% 3,951 (5.6%) (4.9%) 6.2% Life Sciences 982 4.9% 5.8%
Slide 9: FY 2017 U.S. and International Revenues
FY 2017 U.S. and International Revenues Second Quarter Year-to-Date Comparable Comparable Growth FXN FXN $ FXN $ Growth % FXN % Growth% Growth% Growth% Growth% U.S. $1,627 (5.4%) (5.4%) 4.0% $3,257 (4.5%) (4.5%) 4.8% Medical 1,159 (9.3%) (9.3%) 3.2% 2,352 (7.5%) (7.5%) 4.9% Life Sciences 467 6.0% 6.
Slide 10: FY 2017 Developed & Emerging Markets
FY 2017 Developed & Emerging Markets Second Quarter Year-to Date % of BD Comparable % of BD Comparable $ $ Revenues FXN Growth % Revenues FXN Growth % Developed $2,517 85% 4.5% $4,983 85% 5.1% Markets Emerging $452 15% 8.7% $908 15% 8.2% Markets China $168 6% 11.9% $330 6% 10.5% Note: Emerging marke
Slide 11: FY 2017 Safety Revenues
FY 2017 Safety Revenues Second Quarter Year-to-Date FXN FXN $ Growth % $ Growth % Growth% Growth% Total Safety $774 5.6% 6.3% $1,536 4.5% 5.1% By Geography U.S. 459 3.7% 3.7% 914 2.7% 2.7% International 315 8.6% 10.3% 623 7.4% 8.9% By Segment Medical 485 4.3% 4.7% 968 3.9% 4.2% Life Sciences 289 8.0
Slide 12: Q2 FY 2017 Adjusted Income Statement
Q2 FY 2017 Adjusted Income Statement Favorable (Unfavorable) Adjusted Q2 Adjusted Q2 FXN % $ Change % Change FY 2017 FY 2016 Change Revenues $2,969 $3,071 ($102) (3.2%) (2.4%) Comparable basis 5.2% Gross Profit 1,563 1,625 (62) (3.8%) (0.8%) % of Revenues 52.6% 52.9% SSG&A 721 751 30 4.0% 3.2% % of
Slide 13: Q2 FY 2017 Adjusted Margin Changes Year-Over-Year
Q2 FY 2017 Adjusted Margin Changes Year-Over-Year Gross Profit (% of sales) 0.9% (1.2%) 52.9% 52.6% Q2 2016 Performance Currency Q2 2017 Operating Margin (% of sales) 0.8% (1.3%) 22.6% 22.1% Q2 2016 Performance Currency Q2 2017 Strong progress with ~180 bps underlying operating margin expansion th
Slide 14: Guidance
Guidance Christopher Reidy Executive Vice President, CFO and CAO
Slide 15: Transforming U.S. Dispensing business
Transforming U.S. Dispensing business • Evolving from being a capital focused business to a value based Business software model with an integrated medication management platform that drives better outcomes Model Changes • Enhanced commercial strategy focused on ongoing customer engagement and lifeti
Slide 16: FY 2017 Adjusted EPS Guidance
FY 2017 Adjusted EPS Guidance 13% to 14% FXN Growth $9.70 to 13% to 14% ~1% $9.80 1% to 2% 16% to 18% $9.35 to (2% to 3%) tax rate vs. original $9.45 guidance of 17% to 19% (~4%) No change from February guidance $8.59 FY16 FY17 EPS US Dispensing May Tax Rate FY17 Adjusted May FY17 Adjusted Adjusted
Slide 17: FY 2017 Guidance
FY 2017 Guidance As Adjusted February Guidance May Update (1) BDX Revenues – FXN 4.5% to 5.0% 4.5% to 5.0% (1) Medical Revenues – FXN 4.5% to 5.0% 4.5% to 5.0% Life Sciences Revenues – FXN 4.0% to 5.0% 4.0% to 5.0% Gross Profit 53.0% to 54.0% 53.0% to 54.0% SSG&A 23.5% to 24.0% 23.5% to 24.0% R&D 6.
Slide 18: Executive Overview
Executive Overview Vincent A. Forlenza Chairman and CEO
Slide 19: Q2 FY2017 Business Update: Growth and Strategic Initiatives
Q2 FY2017 Business Update: Growth and Strategic Initiatives • Launch of BD Enterprise Pharmogistics™ 1.0 New Product Innovation • Receives 510(k) clearance for new flow cytometry system Strategic / • Completes acquisition of Caesarea Medical Business Electronics (CME), a global infusion pump systems
Slide 20: Q2 FY2017 Business Update: Operational Efficiencies
Q2 FY2017 Business Update: Operational Efficiencies Operational • Continue to execute on functional transformations Efficiencies • On-track to achieve manufacturing synergies 200 to 225 bps Base plan ~200 bps efficiencies and synergies Operating Margin generating Expansion (FXN) ~100 bps significant
Slide 21: Key Takeaways
Key Takeaways Strong year-to-date performance Medical and Life Sciences segments both performed ahead of our expectations Strong performance and operational efficiencies driving continued robust margin expansion Closing of Bard acquisition expected in fall 2017 Continue to reinvent Medicat
Slide 22: Advancing the World of Health
Advancing the World of Health
Slide 23: Q2 FY 2017 & Q2 FY 2016 Adjustment Reconciliations
Q2 FY 2017 & Q2 FY 2016 Adjustment Reconciliations (Unaudited; Amounts in millions, except per share data) Three Months Ended March 31, 2017 Selling and Research and Acquisitions and Other Operating Diluted Administrative Development Other (Income) Operating Interest Other Income Tax Earnings Revenu
Slide 24: Q2 YTD FY 2017 & Q2 YTD FY 2016 Adjustment Reconciliations
Q2 YTD FY 2017 & Q2 YTD FY 2016 Adjustment Reconciliations (Unaudited; Amounts in millions, except per share data) Six Months Ended March 31, 2017 Selling and Research and Acquisitions and Other Operating Diluted Administrative Development Other (Income) Operating Interest Other Income Tax Earnings
Slide 25: Q2 FY 2017 Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS
Q2 FY 2017 Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS (Unaudited) Three Months Ended March 31, Foreign Foreign Foreign Currency Currency Currency Neutral Growth Neutral 2017 2016 Growth Translation Growth % Growth % Reported Diluted Earnings per Share $ 1.58 $ 1.56 $ 0.02 $ (0.16
Slide 26: YTD FY 2017 Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS
YTD FY 2017 Reconciliation of Reported Diluted EPS to Adjusted Diluted EPS (Unaudited) Six Months Ended March 31, Foreign Foreign Foreign Currency Currency Currency Neutral Growth Neutral 2017 2016 Growth Translation Growth % Growth % Reported Diluted Earnings per Share $ 4.15 $ 2.62 $ 1.53 $ (0.17)
Slide 27: FY 2017 Reconciliation – FX Impact Emerging and Developed Markets
FY 2017 Reconciliation – FX Impact Emerging and Developed Markets (Unaudited; Amounts in millions) Emerging Markets* Developed Markets Q1 Q2 Q2 YTD Q3 Q4 Full Year Q1 Q2 Q2 YTD Q3 Q4 Full Year BDX Reported 2017 456 452 908 2,466 2,517 4,983 Adjusted Comparable Growth % 4.7 7.7 6.2 5.6 3.4 4.3 FX Neu
Slide 28: FY 2017 Reconciliation – FX Impact Emerging Markets Safety and China
FY 2017 Reconciliation – FX Impact Emerging Markets Safety and China Emerging Markets Safety* Q1 Q2 Q2 YTD Q3 Q4 Full Year BDX Reported 2017 116 117 232 Adjusted Comparable Growth % 15.3 12.6 13.9 FX Neutral Growth % 18.1 13.4 15.7 FX Impact % (2.8) (0.8) (1.8) A+B BDX Reported 2016 100 104 204 122
Slide 29: Q2 and Q2 YTD FY 2017 Safety Revenues
Q2 and Q2 YTD FY 2017 Safety Revenues (Unaudited; Amounts in millions) Three Months Ended March 31, A B C D=(A-B)/B E=(A-B-C)/B As Reported FX % Change 2017 2016 Impact Reported FXN TOTAL SAFETY REVENUES United States $ 459 $ 443 $ - 3.7 3.7 International 315 290 (5) 8.6 10.3 TOTAL $ 774 $ 733 $ (5)
Slide 30: FY 2017 Outlook Reconciliation
FY 2017 Outlook Reconciliation FY2016 FY2017 Outlook Revenues % Change FX Impact % Change FXN BDX As Reported Revenue $ 12,483 (3.5% - 4.0%) ~(1.5%) (2.0% - 2.5%) Divestitures Revenue (1) (843) BDX Comparable Revenue $ 11,639 3.0% - 3.5% ~(1.5%) 4.5% - 5.0% BD Medical As Reported Revenue $ 8,654 (6.
Slide 31: FY 2016 Comparable Revenues for FY 2017 Guidance
FY 2016 Comparable Revenues for FY 2017 Guidance FY 2016 Comparable Revenues for FY 2017 Guidance FY 2017 Guidance $3,026 $2,996 (3.5% to 4.0%) FY 2017 reported growth on FY 2016 $2,848 BDX As Reported Revenues $2,770 of $12,483 Note: Reported revenue decline due to divestitures and (~150 bps) estim
Slide 32: FY 2017 Planned Product Launches
FY 2017 Planned Product Launches Medical Segment Program / Product Planned Launch Date • IV Solutions FY 2017 • BD Hylok™ FY 2017 • Rowa Cmax FY 2017 • Rowa VMAX® 210 FY 2017 • BD Enterprise Pharmogistics™ 1.0 Q1 FY 2017 • BD Pyxis™ ES Enterprise Server 1.5 FY 2017 • BD Neopak™ Prefillab
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