Baxter International Inc. · NYSE:BAX
Baxter International — Q4 2016 Earnings Presentation
21 slides from Baxter International's earnings presentation, Feb 1, 2017
Slide 1: Fourth-Quarter And Full-Year 2016 Earnings
Fourth-Quarter And Full-Year 2016 Earnings Baxter International Inc. February 1, 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 16 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: 2016 Business Highlights
Delivering On Our Strategy 2016 Business Highlights Building Momentum With Strong Capitalizing On New Product Launches Operational Performance And Geographic Expansions ► Exceeded 2016 adjusted earnings and free cash flow guidance ► Reallocated investment to higher-margin, faster-growing businesses
Slide 6: Accelerating Growth Of Key Metrics: Full-Year 2016 Financial Snapshot
Accelerating Growth Of Key Metrics Full-Year 2016 Financial Snapshot1 Sales Growth Adjusted Adjusted Free Cash Flow2 (Constant Currency) Operating Margin Diluted EPS 13.6% +4% $1.96 ~$0.9B +300bps +460bps +42% >2.5x 9.0% $1.38 ~$0.3B +1% 2015 2016 2015 2016 2015 2016 2015 2016 1See www.baxter.com fo
Slide 7: Fourth-Quarter And Full-Year 2016 Sales And Adjusted Earnings
Fourth-Quarter And Full-Year 2016 Sales And Adjusted Earnings1 Reported Constant Metric Q4 2016 Q4 2015 Growth Growth2 Sales $2,645 $2,603 +2% +2% (Millions) Adjusted $0.57 $0.43 +33% -- Diluted EPS Reported Constant Metric FY 2016 FY 2015 Growth Growth2 Sales $10,163 $9,968 +2% +4% (Millions) Adjus
Slide 8: Advancing Our New Product Portfolio
Advancing Our New Product Portfolio 2016 R&D Milestones Hospital Products Renal ► Expanded launch of HEMOPATCH ► AMIA continues to build momentum with nearly 1,500 patients in the U.S. ► SIGMA SPECTRUM awarded “2016 Best in KLAS” by KLAS Research ► Continued adoption of SHARESOURCE technology global
Slide 9: Financial Results
Financial Results Fourth-Quarter And Full-Year 2016 Earnings February 1, 2017 SIGMA SPECTRUM Manufacturing Medina, New York
Slide 10: Fourth-Quarter And Full-Year 2016 Sales By Franchise
Fourth-Quarter And Full-Year 2016 Sales By Franchise Q4 2016 Revenue Total Growth FY 2016 Revenue Total Growth $ In Millions U.S. Int. Total Actual Constant U.S. Int. Total Actual Constant Fluid Systems $353 $261 $614 +8% +8% $1,307 $993 $2,300 +9% +11% I.P.S.1 $264 $299 $563 (5%) (4%) $1,048 $1,197
Slide 11: Fourth-Quarter And Full-Year 2016 Adjusted Financial Results
Fourth-Quarter And Full-Year 2016 Adjusted Financial Results1 Metric Q4 2016 Q4 2015 Change FY 2016 FY 2015 Change Adjusted 44.5% 42.6% +190 bps 43.9% 43.3% +60 bps Gross Margin Adjusted SG&A Expense2 23.4% 25.8% (240 bps) 24.7% 28.4% (370 bps) (% of Sales) Adjusted R&D Expense 5.7% 6.1% (40 bps) 5.
Slide 12: Full-Year And Quarterly 2016 Financial Results
Full-Year And Quarterly 2016 Financial Results1 Metric Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Sales (Millions) $2,375 $2,585 $2,558 $2,645 $10,163 Reported Growth (1%) +4% +3% +2% +2% Constant Currency Growth +4% +6% +4% +2% +4% Adjusted Gross Margin 42.3% 43.8% 44.9% 44.5% 43.9% Adjusted Operating
Slide 13: Driving Operational Excellence Across The Company
Driving Operational Excellence Across The Company1 Adjusted Operating Margin Quarterly Highlights Q4 2016 vs. Q4 2015 Improved adjusted gross margin of 44.5% driven 15% by favorable manufacturing performance and +280 bps modest price improvements in select areas +190 bps 10% SG&A improvement dri
Slide 14: 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 Flow Focused cost management and Investment prioritization and Enhanced flexibility allows working capital improvements spending control strategic capital deplo
Slide 15: Opportunistically Deploying Capital To Fuel Growth And Create Value
Opportunistically Deploying Capital To Fuel Growth And Create Value Reinvestment in 2016 Highlights Business Restructured debt complex to reduce interest rate and extend term Dividends Realized net debt to EBITDA1 ratio of zero Increased dividend 13%; targeting ~35% payout ratio BAX of adjuste
Slide 16: 2017 Outlook
2017 Outlook Fourth-Quarter And Full-Year 2016 Earnings February 1, 2017 Baxter Center for Spectroscopy and Imaging Round Lake, Illinois
Slide 17: Initial 2017 Full-Year Financial Guidance
Initial 2017 Full-Year Financial Guidance1 Metric FY 2017 2017 Sales Headwinds: Sales Growth [Constant Currency] ~2% ► Foreign exchange [~200 bps] Sales Growth ~0% ► Cyclo competition [~$95M] [Reported] ► Strategic market exits [~$100M] Adjusted Operating Margin ~15% Adjusted Diluted EPS $2.10 - $2.
Slide 18: Initial 2017 Full-Year Sales Guidance
Initial 2017 Full-Year Sales Guidance1 FY 2017 FY 2017 Sales Growth Constant Currency Operational2 Total Baxter ~2% ~4% Renal 3% - 4% 4% - 5% Hospital Products 1% - 2% 3% - 4% Fluid Systems 2% - 3% 4% - 5% Integrated Pharmacy Solutions Low single-digit decline ~3% Surgical Care 2% - 3% 2% - 3% Other
Slide 19: First Quarter 2017 Financial Guidance
First Quarter 2017 Financial Guidance1 Metric Q1 2017 Q1 2017 Sales Headwinds: ► Foreign exchange [100+ bps] Sales Growth 3% - 4% ► Cyclo competition [~$10M] [Constant Currency] ► Strategic market exits [~$30M] Sales Growth 2% - 3% [Reported] Q1 2017 Sales Guidance: 2% - 3% 5% - 6% Adjusted Reported
Slide 20: 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 ► Preparing to integrate Claris Injectables to accelerate top-line growth and build out platform1 ► Realizing ongoing benefits of
Slide 21: Fourth-Quarter And Full-Year 2016 Earnings
Fourth-Quarter And Full-Year 2016 Earnings Baxter International Inc. February 1, 2017