Slide 1: Second-Quarter 2024 Earnings
S E C O N D - Q UA R T E R 2 0 24 E A R N I N G S Baxter International Inc. August 6, 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 third-quarter and full-year 2024) and business development and regulatory activities. These forward-looking statements are based on
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 13 2024 Outlook 21 Non-GAAP Reconciliations 25 4
Slide 5: Performance Summary
P E R FO R M A N C E S U M M A RY Second-Quarter 2024 Earnings August 6, 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 Q2 2024 Results1 Constant currency sales increased 4%, exceeding previously announced guidance, driven by better-than-expected results across all segments Adjusted earnings per share from continuing operation
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 Second-Quarter 2024 First-Half 2024 $3.8B +3% Reported +4% Constant Currency 2 $7.4B +3% Reported +3% Constant Currency 2 Sales Sales Key Metrics GAAP Adjusted3 Key Metrics GAAP Adjusted3 Gross Margin 37.5% 41.2% Gross
Slide 8: Key Financial Metrics: Second-Quarter Snapshot
KEY FINANCIAL METRICS S E C O N 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 $3.7B $3.8B 13.2% 13.7% $0.68 $0.55 +4% Constant Growth 2 +50 bps +24% Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q
Slide 9: Key Financial Metrics: First-Half Snapshot
KEY FINANCIAL METRICS F I R S T - H A L F 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 EPS2 $7.2 B $7.4 B 14.0% $1.33 12.9% $1.04 +3% Constant Growth 3 +110 bps +28% H1 2023 H1 2024 H1 2023 H1 2024 H1 2023 H1 20
Slide 10: Second-Quarter Adjusted Financial Results
S E C O N 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 ) Q2 2023 Q2 2024 Change Adjusted Gross Margin 40.4% 41.2% +80 bps Adjusted SG&A Expense 22.8% 22.9% +10 bps (% of Sales) Adjusted R&D Expense 4.5% 4.6% +10 bps (% of Sales) Adj
Slide 11: Second-Quarter Performance vs Guidance
S E C O N D - Q UA R T E R 2 0 24 P E R FO R M A N C E 1 ( C O N T I N U I N G O P E R AT I O N S ) Metric Q2 2024 Q2 2024 Guidance Actual Sales Growth ~1% +3% Reported Sales Growth 2% - 3% +4% Constant Currency GAAP Diluted EPS N/A ($0.62) Growth vs. Prior-Year Period +59% Adjusted Diluted EPS $0.6
Slide 12: Executing Portfolio Management Actions to Accelerate Disciplined Capital Allocation Strategy
EXECUTING PORTFOLIO MANAGEMENT ACTIONS 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 return Expect to have the abil
Slide 13: 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 Second-Quarter 2024 Earnings August 6, 2024 13
Slide 14: Second-Quarter Sales by Product Category
S E C O N 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 Q2 2024 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Infusion Therapies & Technologies $579 $466 $1,045 +4% +5% Advanced Surgery $150 $127 $277 +2% +4% Medical Products & Therapies $729 $593
Slide 15: First-Half Sales by Product Category
F I R S T- H A L F 2 0 24 S A L E S BY P RO D U C T C AT E G O RY 1 H1 2024 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Infusion Therapies & Technologies $1,105 $906 $2,011 +5% +5% Advanced Surgery $297 $243 $540 +4% +6% Medical Products & Therapies $1,402 $1,149 $2
Slide 16: Second-Quarter Business Drivers
S E C O N 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 strong growth internationally across the division, particularly for IV Infusion Therapies & $1,045M +5% solutions and infusions system
Slide 17: Second-Quarter Segment Results
S E C O N D - Q UA R T E R 2 0 24 S E G M E N T R E S U LT S Q2 2024 Results1 Segment Segment Reported Reported Constant Operating Operating YoY Margin $ In Millions Revenue Growth Growth Income Margin Change2 Medical Products & Therapies $1,322 +4% +5% $238 18.0% (270 bps) Healthcare Systems & $748
Slide 18: First-Half Segment Results
F I R S T- H A L F 2 0 24 S E G M E N T R E S U LT S H1 2024 Results1 Segment Segment Reported Reported Constant Operating Operating YoY Margin $ In Millions Revenue Growth Growth Income Margin Change2 Medical Products & Therapies $2,551 +5% +5% $465 18.2% (70 bps) Healthcare Systems & $1,415 (4%) (
Slide 19: Second-Quarter Results
S E C O N D - Q UA R T E R 2 0 24 R E S U LT S 1 Q2 2024 Results Adjusted Adjusted Reported Reported Constant Operating Operating YoY Margin $ In Millions Revenue Growth Growth Income Margin Change2 Total Baxter $3,812 +3% +4% $522 13.7% +50 bps 1Non-GAAP financial metrics referenced in this slide i
Slide 20: First-Half Results
F I R S T- H A L F 2 0 24 R E S U LT S 1 H1 2024 Results Adjusted Adjusted Reported Reported Constant Operating Operating YoY Margin $ In Millions Revenue Growth Growth Income Margin Change2 Total Baxter $7,404 +3% +3% $1,037 14.0% +110 bps 1Non-GAAP financial metrics referenced in this slide includ
Slide 21: 2024 Outlook
2 0 24 O U T LO O K Second-Quarter 2024 Earnings August 6, 2024 21
Slide 22: Third-Quarter Guidance
T H I R D - Q UA R T E R 2 0 24 G U I DA N C E 1 Q3 2024 Guidance Sales Growth 3% - 4% Reported Foreign Exchange >50 bps Sales Growth 4% - 5% Constant Currency Adjusted Diluted EPS $0.77 - $0.79 1Non-GAAP financial metrics referenced in this slide include constant currency sales growth and adjusted
Slide 23: 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 ~3% Reported Foreign Exchange <50 bps Sales Growth ~3% Constant Currency Adjusted Diluted EPS $2.93 - $3.01 1Non-GAAP financial metrics referenced in this slide include constant currency sales growth and adjusted diluted EPS. 23
Slide 24: 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 ~5% Healthcare Systems & Technologies ~0% Pharmaceuticals ~7% Baxter (Excluding Kidney Care) ~4% Kidney Care 1% - 2% Total Baxter ~3% 1Non-GAAP financial metrics ref
Slide 25: Non-GAAP Reconciliations
NON-GAAP R E C O N C I L I AT I O N S Second-Quarter 2024 Earnings August 6, 2024 25
Slide 26: Non-GAAP Reconciliations as of August 6, 2024
NON-GAAP RECONCILIATIONS AS OF AUGUST 6, 2024 Non-GAAP Reconciliations: As part of its Q2 2024 earnings announcement on August 6, 2024, Baxter presented its financial results for the second quarter of 2024. Baxter also presented guidance for the third quarter and full year of 2024. In these presenta
Slide 27: Reconciliations: Three Months Ended June 30, 2024
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Three Months Ended June 30, 2024 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended June 30, 2024 included special items which impacted the U.S. GA
Slide 28: Reconciliations: Three Months Ended June 30, 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Three Months Ended June 30, 2023 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended June 30, 2023 included special items which impacted the U.S. GA
Slide 29: Adjustment Descriptions: Three Months Ended June 30, 2024 and 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Three Months Ended June 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. In 2024, these costs primarily related
Slide 30: Reconciliations: Six Months Ended June 30, 2024
DESCRIPTIONS OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Six Months Ended June 30, 2024 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the six months ended June 30, 2024 included special items which impacted the U.S. GAAP
Slide 31: Reconciliations: Six Months Ended June 30, 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Six Months Ended June 30, 2023 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the six months ended June 30, 2023 included special items which impacted the U.S. GAAP m
Slide 32: Adjustment Descriptions: Six Months Ended June 30, 2024 and 2023
DESCRIPTION OF ADJUSTMENTS AND RECONCILIATIONS OF U.S. GAAP TO NON-GAAP MEASURES Six Months Ended June 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. In 2024, these costs primarily related to
Slide 33: Operating Cash Flow to Free Cash Flow
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Operating Cash Flow to Free Cash Flow (unaudited) (in millions) Six Months Ended June 30, 2024 2023 Cash flows from operations – continuing operations $ 278 $ 780 Cash flows from investing activities - continuing operations (257) (326) Cash flows from fin
Slide 34: 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 June 30, 2023 to The Three Months Ended June 30, 2024 (unaudited) Sales By Product Category: Net Sales Growth Constant Currency Sales As Reported FX Growt
Slide 35: Net Sales Growth to Constant Currency: Six Months
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Change in Net Sales Growth As Reported to Constant Currency Sales Growth From The Six Months Ended June 30, 2023 to The Six Months Ended June 30, 2024 (unaudited) Sales By Product Category: Net Sales Growth Constant Currency Sales As Reported FX Growth* I
Slide 36: Projected Sales Growth Reconciliation
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE Projected Third 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) Sales Growth Guidance Q3 2024 FY 202
Slide 37: Projected 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 Third Quarter and Full Year 2024 Projected Adjusted Earnings Per Share (unaudited) Adjusted Operating Margin Guidance FY 2024
Slide 38: Second-Quarter 2024 Earnings
S E C O N D - Q UA R T E R 2 0 24 E A R N I N G S Baxter International Inc. August 6, 2024 38