Baxter International Inc. · NYSE:BAX
Baxter International — Q4 2021 Earnings Presentation
35 slides from Baxter International's earnings presentation, Feb 17, 2022
Slide 1: Fourth-Quarter 2021 Earnings
Fourth-Quarter 2021 Earnings Baxter International Inc. February 17, 2022 Hillrom is a part of Baxter
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements concerning the company’s financial results (including the outlook for first-quarter and full-year 2022) and business development activities (including the December 2021 acquisition of Hillrom). These forward-looking sta
Slide 3: Hillrom Acquisition; Use of Non-GAAP Financial Measures
Hillrom Acquisition Following Baxter’s acquisition of Hillrom on Dec. 13, 2021, Baxter’s fourth-quarter and full-year 2021 financial results include Hillrom’s financial results for the last 19 days of the quarter ended Dec. 31, 2021. Use of Non-GAAP Financial Measures To supplement Baxter’s consolid
Slide 4: Table of Contents
Table of Contents Performance Summary 5 Financial Results 11 2022 Outlook 21 Non-GAAP Reconciliations 24
Slide 5: Performance Highlights
Performance Highlights Fourth-Quarter 2021 Full-Year 2021 $3.5B +12% Constant Currency $12.8B +7% Constant Currency +10% Reported +10% Reported 1 1 Sales +4% Operational2 Sales +5% Operational2 Key Metrics GAAP Adjusted3 Key Metrics GAAP Adjusted3 Gross Margin 40.0% 44.3% Gross Margin 39.9% 43.3% YO
Slide 6: Executing On Our Strategy
Executing On Our Strategy Recent Highlights Demonstrating Ongoing Portfolio Resilience In Dynamic Environment1 ▪ Delivered operational sales growth of 4% and adjusted diluted EPS growth of 30% in Q4 2021, demonstrating the diversity and durability of our portfolio amid the ongoing COVID-19 pandemic
Slide 7: Key Financial Metrics: Fourth-Quarter 2021 Snapshot
Key Financial Metrics Fourth-Quarter 2021 Snapshot1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS $3.5B 20.3% $1.04 $3.2B 17.7% $0.80 +4% Operational Growth 2 +260 bps +30% Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 1Non-GAAP financial metrics referenced in this slide inc
Slide 8: Key Financial Metrics: Full-Year 2021 Snapshot
Key Financial Metrics Full-Year 2021 Snapshot1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS $12.8B $3.61 $11.7B $3.09 18.0% 18.8% +5% Operational Growth 2 +80 bps +17% FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 1Non-GAAP financial metrics referenced in this slide include
Slide 9: Fourth-Quarter 2021 Performance
Fourth-Quarter 2021 Performance1, Metric Q4 2021 Q4 2021 Guidance2 Actual Sales Growth 3% - 4% +10% Reported Sales Growth 4% - 5% +12% Constant Currency Sales Growth 3% - 4% +4% Operational Adjusted Diluted EPS $1.00 - $1.04 $1.04 Growth vs. Prior-Year Period 25% –30% +30% Hillrom Contributed $0.08
Slide 10: Strong Performance Driven By Pandemic Recovery
Strong Performance Driven By Pandemic Recovery Fourth-Quarter 2021 Business Drivers1 Product Category Sales CC Growth2 Quarterly Performance Drivers Performance in the quarter was driven by global growth in both our PD and HD businesses. Renal Care $1,033M +4% PD benefited from year over year improv
Slide 11: Financial Results
Financial Results Fourth-Quarter 2021 Earnings February 17, 2022 11
Slide 12: Fourth-Quarter 2021 Sales By Product Category
Fourth-Quarter 2021 Sales By Product Category1,2 Q4 2021 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Operational Renal Care $235 $798 $1,033 +2% +4% +4% Medication Delivery $514 $270 $784 +6% +6% +6% Pharmaceuticals $203 $401 $604 +7% +8% +2% Clinical Nutrition $88
Slide 13: Full-Year 2021 Sales By Product Category
Full-Year 2021 Sales By Product Category1,2 FY 2021 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Operational Renal Care $890 $3,010 $3,900 +4% +2% +2% Medication Delivery $1,859 $1,021 $2,880 +7% +6% +6% Pharmaceuticals $753 $1,538 $2,291 +9% +5% +0% Clinical Nutriti
Slide 14: Fourth-Quarter 2021 Sales By Operating Segment
Fourth-Quarter 2021 Sales By Operating Segment1 Q4 2021 Revenue Total Growth $ In Millions Reported Reported Constant Operational Americas $1,755 +4% +5% +5% (North and South America) EMEA (Europe, Middle East and $815 +2% +5% +1% Africa) APAC $732 +5% +6% +5% (Asia Pacific) Hillrom $212 N/A N/A N/A
Slide 15: Full-Year 2021 Sales By Operating Segment
Full-Year 2021 Sales By Operating Segment1 FY 2021 Revenue Total Growth $ In Millions Reported Reported Constant Operational Americas $6,666 +5% +5% +5% (North and South America) EMEA (Europe, Middle East and $3,115 +8% +5% +2% Africa) APAC $2,791 +13% +8% +7% (Asia Pacific) Hillrom $212 N/A N/A N/A
Slide 16: Hillrom 2021 Quarterly Sales by Product Category
Hillrom 2021 Quarterly Sales by Product Category Hillrom Revenue - Calendar Year 2021 $ In Millions (unaudited) Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 Patient Support Systems $398 $376 $417 $375 $1,566 Front Line Care $285 $266 $296 $281 $1,128 Surgical Solutions $79 $76 $85 $68 $308 Total Hillrom
Slide 17: Fourth-Quarter 2021 Adjusted Financial Results
Fourth-Quarter 2021 Adjusted Financial Results1 Q4 2020 Q4 2021 Change Adjusted Gross Margin 41.4% 44.3% +290 bps Adjusted SG&A Expense 19.6% 20.2% +60 bps (% of Sales) Adjusted R&D Expense 4.1% 3.8% (30 bps) (% of Sales) Adjusted Operating Margin 17.7% 20.3% +260 bps Adjusted Diluted EPS $0.80 $1.0
Slide 18: Full-Year 2021 Adjusted Financial Results
Full-Year 2021 Adjusted Financial Results1 FY 2020 FY 2021 Change Adjusted Gross Margin 42.4% 43.3% +90 bps Adjusted SG&A Expense 20.2% 20.4% +20 bps (% of Sales) Adjusted R&D Expense 4.2% 4.1% (10 bps) (% of Sales) Adjusted Operating Margin 18.0% 18.8% +80 bps Adjusted Diluted EPS $3.09 $3.61 +17%
Slide 19: Maintaining Focus On Cash Flow Generation
Maintaining Focus On Cash Flow Generation1 Operating Cash Flow2 Capital Expenditures Free Cash Flow3 $2,222M $1,870M $1,479M $1,161M $709M $743M FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 1Non-GAAP financial metrics referenced in this slide include free cash flow. A reconciliation to comparable
Slide 20: Executing Disciplined Capital Allocation Strategy
Executing Disciplined Capital Allocation Strategy Strategic Business Development Acquired Hillrom on December 13, 2021; positions company to accelerate top- and bottom-line performance and drive innovation in connected care solutions focused on enhancing clinical outcomes for patients and improving
Slide 21: 2022 Outlook
2022 Outlook Fourth-Quarter 2021 Earnings February 17, 2022 21
Slide 22: Full-Year 2022 Guidance
Full-Year 2022 Guidance1 FY 2022 Guidance Sales Growth 24% - 25% Reported Foreign Exchange ~ 200bps Sales Growth 26% - 27% Constant Currency Hillrom 2200 – 2300 bps Sales Growth ~4% Operational GAAP Diluted EPS $2.91 - $3.01 Growth vs. Prior-Year Period 15% – 19% Adjusted Diluted EPS $4.25 - $4.35 G
Slide 23: First-Quarter 2022 Guidance
First-Quarter 2022 Guidance1 Q1 2022 Guidance Sales Growth 24% - 25% Reported Foreign Exchange ~300 bps Sales Growth 27% - 28% Constant Currency Hillrom 2500 - 2600 bps Sales Growth LSD2 Growth Operational GAAP Diluted EPS $0.46 - $0.49 Growth vs. Prior-Year Period (21%) – (16%) Adjusted Diluted EPS
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Fourth-Quarter 2021 Earnings February 17, 2022 24
Slide 25: Non-GAAP Reconciliation as of February 17, 2022
Non-GAAP Reconciliation as of February 17, 2022 Non-GAAP Reconciliations: As part of its Q4 2021 earnings announcement on February 17, 2022, Baxter presented its financial results for the fourth quarter and full year of 2021. Baxter also presented guidance for the Q1 2022 and full year of 2022. In t
Slide 26: Reconciliation of U.S. GAAP to Non-GAAP Measures: Three Months
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Three Months Ended December 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 December 31, 2021 included special items which impa
Slide 27: Reconciliation of U.S. GAAP to Non-GAAP Measures: Three Months Notes
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Three Months Ended December 31, 2021 and 2020 (unaudited) 1 The company’s results in 2021 and 2020 included intangible asset amortization expense of $99 million ($76 million, or $0.15 per diluted share, on an after-tax b
Slide 28: Reconciliation of U.S. GAAP to Non-GAAP Measures: Full Year
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Years Ended December 31, 2021 and 2020 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the year ended December 31, 2021 included special items which impacted the U.S. G
Slide 29: Reconciliation of U.S. GAAP to Non-GAAP Measures: Full Year Notes
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Years Ended December 31, 2021 and 2020 (unaudited) 1 The company’s results in 2021 and 2020 included intangible asset amortization expense of $298 million ($234 million, or $0.46 per diluted share, on an after-tax basis)
Slide 30: Operating Cash Flow to Free Cash Flow
Reconciliation of Non-GAAP Financial Measure Operating Cash Flow to Free Cash Flow (unaudited) (in millions) Years Ended December 31, 2021 2020 Cash flows from operations – continuing operations $ 2,222 $ 1,870 Cash flows from investing activities (11,200) (1,179) Cash flows from financing activitie
Slide 31: Net Sales Growth As Reported to Operational: Q4
Reconciliation of Non-GAAP Financial Measure Change in Net Sales Growth As Reported to Operational Sales Growth From The Three Months Ended December 31, 2020 to The Three Months Ended December 31, 2021 (unaudited) Sales By Product Category: Net Sales Growth Operational As Reported Caelyx and Doxil H
Slide 32: Net Sales Growth As Reported to Operational: Full Year
Reconciliation of Non-GAAP Financial Measure Change in Net Sales Growth As Reported to Operational Sales Growth From The Year Ended December 31, 2020 to The Year Ended December 31, 2021 (unaudited) Sales By Product Category: Net Sales Growth Operational As Reported Caelyx and Doxil Hillrom FX Sales
Slide 33: Projected 2022 Sales Growth and Operating Margin Reconciliation
Reconciliation of Non-GAAP Financial Measure Projected First Quarter and Full Year 2022 U.S. GAAP Sales Growth to Projected Operational Sales Growth and Projected Full Year 2022 U.S. GAAP Operating Margin to Projected Adjusted Operating Margin (unaudited) Sales Growth Guidance Q1 2022* FY 2022* Sale
Slide 34: Projected 2022 Tax Rate and EPS Reconciliation
Reconciliation of Non-GAAP Financial Measure Projected Full Year 2022 U.S. GAAP Tax Rate to Projected Adjusted Tax Rate, and Projected First Quarter and Full Year 2022 U.S. GAAP Earnings Per Share to Projected Adjusted Earnings Per Share (unaudited) The projected FY 2022 U.S. GAAP tax rate of approx
Slide 35: Fourth-Quarter 2021 Earnings
Fourth-Quarter 2021 Earnings Baxter International Inc. February 17, 2022 Hillrom is a part of Baxter