Baxter International Inc. · NYSE:BAX
Baxter International — Q1 2017 Earnings Presentation
20 slides from Baxter International's earnings presentation, Apr 26, 2017
Slide 1: First-Quarter 2017 Earnings
First-Quarter 2017 Earnings Baxter International Inc. April 26, 2017
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes forward-looking statements concerning Baxter’s expected business prospects, long range plan, capital structure, cost savings initiatives, R&D pipeline including regulatory actions and commercial launch events, business development plans (including Bax
Slide 3: Table Of Contents
Table Of Contents Performance Summary 5 Financial Results 9 2017 Outlook 15 IV Solutions R&D Alliance Park, Belgium
Slide 4: Executing A Disciplined Strategy To Deliver Top-Quartile Shareholder Returns
Executing A Disciplined Strategy To Deliver Top- Quartile Shareholder Returns Focused, market-leading product portfolio Quality and patient safety Leaner, more efficient operating model Best place to work Strengthened profitability and returns Industry-leading performance Strong capital structure De
Slide 5: Delivering On Our Strategy: Business Highlights
Delivering On Our Strategy Business Highlights Building Momentum With Strong Capitalizing On New Product Launches Operational Performance And Geographic Expansions ► Delivered strong first-quarter sales and earnings performance; ► Reallocating investment to higher-margin, faster-growing increased fu
Slide 6: Accelerating Growth Of Key Metrics: Q1 2017 Financial Snapshot
Accelerating Growth Of Key Metrics First-Quarter 2017 Financial Snapshot1 Operational Adjusted Adjusted Sales Growth Operating Margin Diluted EPS 16.4% $0.58 +7% +4% 10.5% $0.36 +300bps +590bps +61% Q1 2016 2 Q1 2017 Q1 2016 Q1 2017 Q1 2016 Q1 2017 1See www.baxter.com for information regarding non-G
Slide 7: First-Quarter 2017 Sales And Adjusted Earnings
First-Quarter 2017 Sales And Adjusted Earnings1 Q1 2016 Q1 2017 Q1 2017 Metric Actual2 Guidance3 Actual Operational +4% 5% - 6% +7% Sales Growth Reported (1%) 2% - 3% +4% Sales Growth Adjusted Diluted EPS $0.36 $0.50 - $0.52 $0.58 Growth vs. Prior-Year Period +6% 39% - 44% +61% Delivering Accelerate
Slide 8: Advancing Our New Product Portfolio
Advancing Our New Product Portfolio First-Quarter 2017 R&D Milestones Hospital Products Renal ► Expanded enteral nutrition care portfolio with ENFit ► AMIA continues to build momentum with over 1,600 syringe and accessory line patients in the U.S. ► Signed exclusive agreement with ScinoPharm for ► C
Slide 9: Financial Results
Financial Results First-Quarter 2017 Earnings April 26, 2017 SIGMA SPECTRUM Manufacturing Medina, New York
Slide 10: First-Quarter 2017 Sales By Franchise
First-Quarter 2017 Sales By Franchise Q1 2017 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Operational Fluid Systems $359 $226 $585 +12% +12% +13% I.P.S.1 $266 $286 $552 (1%) +0% +4% Surgical Care $202 $132 $334 +10% +10% +11% Other $60 $48 $108 +17% +18% +18% Hospit
Slide 11: First-Quarter 2017 Adjusted Financial Results
First-Quarter 2017 Adjusted Financial Results1 Metric Q1 2017 Q1 2016 Change Adjusted Gross Margin 44.3% 42.3% +200 bps Adjusted SG&A Expense2 22.6% 26.1% (350 bps) (% of Sales) Adjusted R&D Expense 5.3% 5.7% (40 bps) (% of Sales) Adjusted Operating Margin 16.4% 10.5% +590 bps Adjusted Diluted EPS $
Slide 12: Driving Operational Excellence Across The Company
Driving Operational Excellence Across The Company1 Adjusted Operating Margin Quarterly Highlights Q1 2017 vs. Q1 2016 20% Improved adjusted gross margin of 44.3% driven by business transformation efforts and modest 15% price improvements in select areas +390 bps +200 bps SG&A improvement driven
Slide 13: Disciplined Financial Execution Drives Significant Improvements In Cash Flow Generation
Disciplined Financial Execution Drives Significant Improvements In Cash Flow Generation1 Operating Cash Flow Capital Expenditures Free Cash Flow2 Focused cost management and Investment prioritization and Enhanced flexibility allows working capital improvements spending control strategic capital depl
Slide 14: Opportunistically Deploying Capital To Fuel Growth And Create Value
Opportunistically Deploying Capital To Fuel Growth And Create Value Reinvestment in Current net debt to EBITDA ratio of zero; targeting steady state of ~2.0x Business Targeting ~35% dividend payout ratio of adjusted net income over the long term Dividends Repurchased approximately one million
Slide 15: 2017 Outlook
2017 Outlook First-Quarter 2017 Earnings April 26, 2017 Baxter Center for Spectroscopy and Imaging Round Lake, Illinois
Slide 16: Updated 2017 Full-Year Financial Guidance
Updated 2017 Full-Year Financial Guidance1 FY 2017 FY 2017 Metric Current Prior 2017 Sales Headwinds: Sales Growth [Constant Currency] 2% - 3% ~2% ► Foreign exchange [~100 bps] Sales Growth 1% - 2% ~0% ► Cyclo competition [~$75M] [Reported] ► Strategic market exits [~100 bps] Adjusted Operating Marg
Slide 17: Updated 2017 Full-Year Sales Guidance
Updated 2017 Full-Year Sales Guidance1 FY 2017 FY 2017 Sales Growth Constant Currency Operational Total Baxter 2% - 3% 4% - 5% Renal 3% - 4% 4% - 5% Hospital Products 2% - 3% 4% - 5% Fluid Systems 4% - 5% 5% - 6% I.P.S. Decline low single-digit ~4% Surgical Care ~3% 3% - 4% Other High single-digit i
Slide 18: Second-Quarter 2017 Financial Guidance
Second-Quarter 2017 Financial Guidance1 Metric Q2 2017 Q2 2017 Sales Headwinds: ► Foreign exchange [~200 bps] Sales Growth ~2% ► Cyclo competition [<50 bps] [Constant Currency] ► Strategic market exits [<100 bps] Sales Growth ~0% [Reported] Q2 2017 Sales Guidance: ~0% ~3% Adjusted Reported Operation
Slide 19: Continuing Strong Momentum In 2017
Continuing Strong Momentum In 2017 ► Increasing innovation to drive accelerated revenue growth ► Maintaining strong cadence of product launches and geographic expansions ► Realizing ongoing benefits of cost reduction initiatives and organization optimization ► Opportunistically deploying capital to
Slide 20: First-Quarter 2017 Earnings
First-Quarter 2017 Earnings Baxter International Inc. April 26, 2017