Baxter International Inc. · NYSE:BAX
Baxter International — Merger or Acquisition (September 2021)
26 slides from Baxter International's merger presentation, Sep 2, 2021
Slide 1: Acquisition of Hillrom
Acquisition of September 2, 2021
Slide 2: Baxter Forward-Looking Statements
Baxter Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, each as amended, concerning Baxter’s
Slide 3: Hillrom Forward-Looking Statements
Hillrom Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Statements concerning general economic conditions, our financial condition, results of operations, cash flows and business
Slide 4: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures In this presentation, the company is disclosing certain non-GAAP financial measures which are presented on a standalone basis for Baxter and in some cases on a pro forma basis including Hillrom. These non-GAAP financial measures are not in accordance with generally
Slide 5: Today’s speakers
Today’s speakers José (Joe) E. Almeida John P. Groetelaars James (Jay) Saccaro Chairman, President and President and Chief Executive Vice President Chief Executive Officer Executive Officer and Chief Financial Officer 4
Slide 6: Accelerating our Shared Vision to Transform Healthcare
Accelerating our Shared Vision to Transform Healthcare Advancing patient care and increasing stakeholder value through expanded reach, high-impact innovation and digital enablement 5
Slide 7: Baxter at a glance
Baxter at a glance Leadership Global Opportunity Digital Transformation Established leadership position Optimizing resources across Enabling a digital operating model across portfolio portfolio to deliver digital solutions 2020 Revenue by Business1 Global Category Size & Growth2 Digital Health Total
Slide 8: The Baxter journey
The Baxter journey 2016–2017: 2018–2020: 2021 and Beyond: A Fresh Start Building the Foundation Accelerating Transformation ✓ Realigned structure to drive innovation ✓ Refined corporate strategy Unlocking innovation across the care continuum through digital ✓ Created regional go-to-market strategies
Slide 9: Hillrom at a glance
Hillrom at a glance1 Leadership Global Opportunity Innovation Global medical technology leader Shifting focus to higher-growth Advancing category leadership with with a diversified portfolio categories healthcare solutions 2020 Revenue by Business2 Global Category Size & Growth3 New Product Revenue
Slide 10: Hillrom’s transformation
Hillrom’s transformation1 Connected Care Strategy Revenue Mix Shift Offering connected care solutions Portfolio evolution and innovation to address pain points2 driving non-capital revenue mix growth 20%+ Connected Care 2021 Expected Revenue Growth $2.9B ~50% ~70% ~65% $1.5B <20% ~50% Non-Capital Sm
Slide 11: A strategic and complementary combination
A strategic and complementary combination Shared vision to transform healthcare by improving clinical outcomes through accelerated product and digital innovation across the care continuum and care settings Expanded reach brings our combined portfolio of products and solutions to even more patients a
Slide 12: Shared vision to transform healthcare
Shared vision to transform healthcare Enhance clinical outcomes and Drive actionable insights through Enable hospital @ home and lead efficiencies through product and expanded connected care across care continuum with digital digital innovation solutions solutions Baxter Smart Voalte® Welch Allyn® V
Slide 13: Expanded reach of complementary portfolios
Expanded reach of complementary portfolios Baxter Sales by Geography1 Hillrom Sales by Geography1 Pro Forma Sales by Geography2 $11.7B $2.9B $14.6B US 42% US 68% US 47% International 58% International 32% International 53% Emerging Markets 22% Emerging Markets 9% Emerging Markets 19% Opportunity to
Slide 14: A combined company that will attract and inspire talent
A combined company that will attract and inspire talent Unique opportunity to help shape Baxter’s strategy, position and solutions within the hospital and alternate sites of care Shared mission to improve clinical Continued focus on being a Best Expanded innovation pipeline, outcomes and care effici
Slide 15: Meaningful value creation opportunity
Meaningful value creation opportunity1 2020 Pro Forma Cost Baxter Capital Allocation Financials2 Synergies Priorities ▪ Back-office optimization & other ▪ Committed to investment grade $14.6B G&A savings ▪ Manufacturing & supply ▪ Strong, sustainable cash flow Sales chain infrastructure ~4.2x $3.3B
Slide 16: Baxter long-term standalone financial outlook
Baxter long-term standalone financial outlook1 2021 – 2024 BAX Standalone Financial Outlook Outlook Sales Growth2 4% - 5% CAGR Adjusted Operating 50+ bps annually Margin Expansion 300+ bps 2021-2024 Adjusted Diluted EPS Low Double Digits CAGR Free Cash Flow 80%+ Conversion3 Baxter standalone outlook
Slide 17: Transaction summary
Transaction summary ▪ Acquisition of 100% of outstanding Hillrom shares for $156.00 per share in cash ― Represents an equity value of $10.5 billion and enterprise value Terms of $12.4 billion ― 26% premium to unaffected stock price as of July 27, 2021 ▪ Assumption / repayment of all outstanding Hill
Slide 18: Meaningful value creation opportunity
Meaningful value creation opportunity ▪ A stronger partner for our customers with broadened product and service offering globally Scale & Growth ▪ Multiple opportunities to expand WAMGR and accelerate growth through an increased presence across connected care, hospital, non-acute and home care setti
Slide 19: Well-positioned for successful integration
Well-positioned for successful integration Baxter has an established track record in business optimization with >$1.0B in annual savings 1 realized since 2015; plan to implement a similar strategy to realize the significant cost savings opportunity Focus of synergy realization will be on minimizing
Slide 20: Driving compelling value for all stakeholders
Driving compelling value for all stakeholders Our Patients and Providers Our People Our Shareholders Combining complementary Uniting talented, diverse Accelerating financial outlook portfolios with connected care employees who have the skills through product and digital offerings to improve patient
Slide 21: Advancing our Mission: Save and Sustain Lives
Advancing our Mission Save and Sustain Lives 20
Slide 22: Non-GAAP Reconciliations
Acquisition of Non-GAAP Reconciliations September 2, 2021
Slide 23: Reconciliation: Baxter Net Sales to Pro Forma Net Sales
Reconciliation of Non-GAAP Financial Measure Baxter Net Sales to Pro Forma1 Net Sales for the Year Ended December 31, 2020 (in millions) Baxter net sales as reported $ 11,673 Hillrom TTM sales ² 2,937 Pro forma net sales $ 14,610 1 Pro forma amounts as presented in this slide represent the combined
Slide 24: Reconciliation: Baxter Net Income to Pro Forma Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measure Baxter Net Income to Pro Forma1 Adjusted EBITDA for the Year Ended December 31, 2020 Baxter Hillrom² Pro Forma (in millions) Net income $ 1,110 $ 242 $ 1,352 Income tax expense 182 58 240 Net interest expense 134 72 206 Depreciation and amortization 823 1
Slide 25: Reconciliation: Cash Flows From Operations to Pro Forma Free Cash Flow
Reconciliation of Non-GAAP Financial Measure Baxter Cash Flows From Operations to Pro Forma1 Free Cash Flow for the Year Ended December 31, 2020 (in millions) Baxter Hillrom² Pro Forma Cash flows from operations - continuing operations $ 1,870 $ 505 $ 2,375 Cash flows from investing activities $ (1,
Slide 26: Acquisition of Hillrom
Acquisition of September 2, 2021
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