Slide 1: Second-Quarter 2021 Earnings
Second-Quarter 2021 Earnings Baxter International Inc. July 29, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements concerning Baxter’s financial results, business development activities, capital structure, cost savings initiatives, R&D pipeline, including results of clinical trials and planned product launches, and outlook for third
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: Top Quartile Goals / Our Strategy
Top Quartile Goals Patient safety and Quality Best place to work Growth through innovation Industry leading performance Our Strategy Strengthen our portfolio and extend our impact through transformative innovation that spans prevention to recovery 4
Slide 5: Table of Contents
Table of Contents Performance Summary 6 Financial Results 12 2021 Outlook 21 Non-GAAP Reconciliations 24
Slide 6: Performance Highlights
Performance Highlights Second-Quarter 2021 First-Half 2021 $3.1B +9% Constant Currency $6.0B +5% Constant Currency +14% Reported +9% Reported 1 1 Sales +8% Operational2 Sales +4% Operational2 Key Metrics` GAAP Adjusted3 Key Metrics GAAP Adjusted3 Gross Margin 39.8% 42.6% Gross Margin 39.3% 42.3% YOY
Slide 7: Executing On Our Strategy
Executing On Our Strategy Recent Highlights Demonstrating Underlying Portfolio Resilience In Dynamic Environment1 ▪ Delivered operational sales growth of 8% and adjusted diluted EPS growth of 25% in Q2 2021, reflecting the steady impact of pandemic recovery in many global markets compared to the sam
Slide 8: Key Financial Metrics: Second-Quarter 2021 Snapshot
Key Financial Metrics Second-Quarter 2021 Snapshot1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS $3.1B 17.2% $0.80 $2.7B 16.0% $0.64 +8% Operational Growth 2 +120 bps +25% Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 1Non-GAAP financial metrics referenced in this slide inc
Slide 9: Key Financial Metrics: First-Half 2021 Snapshot
Key Financial Metrics First-Half 2021 Snapshot1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS $6.0B $1.56 $5.5B $1.46 17.5% 17.1% +4% Operational Growth 2 (40 bps) +7% H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 1Non-GAAP financial metrics referenced in this slide include
Slide 10: Second-Quarter 2021 Performance
Second-Quarter 2021 Performance1 Metric Q2 2021 Q2 2021 Guidance Actual Sales Growth 14% - 15% +14% Reported Sales Growth 8% - 9% +9% Constant Currency Sales Growth 7% - 8% +8% Operational Adjusted Diluted EPS $0.72 - $0.75 $0.80 Growth vs. Prior-Year Period 13% – 17% +25% Disciplined Operational Ex
Slide 11: Demonstrating Portfolio Resiliency Amid COVID-19
Demonstrating Portfolio Resiliency Amid COVID-19 Second-Quarter 2021 Business Drivers1 Product Category Sales CC Growth2 Quarterly Performance Drivers Growth in PD therapies offset by declines in international ICHD business; Renal Care $964M (0%) continue to monitor the impact of excess mortality am
Slide 12: Financial Results
Financial Results Second-Quarter 2021 Earnings July 29, 2021 12
Slide 13: Second-Quarter 2021 Sales By Product Category
Second-Quarter 2021 Sales By Product Category1 Q2 2021 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Operational Renal Care $217 $747 $964 +5% (0%) (0%) Medication Delivery $444 $253 $697 +15% +12% +12% Pharmaceuticals $162 $384 $546 +14% +5% (0%) Clinical Nutrition $
Slide 14: First-Half 2021 Sales By Product Category
First-Half 2021 Sales By Product Category1 H1 2021 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Operational Renal Care $433 $1,453 $1,886 +5% +1% +1% Medication Delivery $855 $494 $1,349 +5% +3% +3% Pharmaceuticals $362 $736 $1,098 +10% +3% (1%) Clinical Nutrition $1
Slide 15: Second-Quarter 2021 Sales By Operating Segment
Second-Quarter 2021 Sales By Operating Segment1 Q2 2021 Revenue Total Growth $ In Millions Reported Reported Constant Operational Americas $1,624 +11% +8% +8% (North and South America) EMEA (Europe, Middle East and $783 +17% +8% +5% Africa) APAC $691 +19% +10% +9% (Asia Pacific) Total Baxter $3,098
Slide 16: First-Half 2021 Sales By Operating Segment
First-Half 2021 Sales By Operating Segment1 H1 2021 Revenue Total Growth $ In Millions Reported Reported Constant Operational Americas $3,184 +5% +4% +4% (North and South America) EMEA (Europe, Middle East and $1,521 +12% +4% +2% Africa) APAC $1,339 +19% +9% +9% (Asia Pacific) Total Baxter $6,044 +9
Slide 17: Second-Quarter 2021 Adjusted Financial Results
Second-Quarter 2021 Adjusted Financial Results1 Q2 2020 Q2 2021 Change Adjusted Gross Margin 41.6% 42.6% +100 bps Adjusted SG&A Expense 21.2% 20.9% (30 bps) (% of Sales) Adjusted R&D Expense 4.3% 4.5% +20 bps (% of Sales) Adjusted Operating Margin 16.0% 17.2% +120 bps Adjusted Diluted EPS $0.64 $0.8
Slide 18: First-Half 2021 Adjusted Financial Results
First-Half 2021 Adjusted Financial Results1 H1 2020 H1 2021 Change Adjusted Gross Margin 43.0% 42.3% (70 bps) Adjusted SG&A Expense 21.1% 20.8% (30 bps) (% of Sales) Adjusted R&D Expense 4.4% 4.4% 0 bps (% of Sales) Adjusted Operating Margin 17.5% 17.1% (40 bps) Adjusted Diluted EPS $1.46 $1.56 +7%
Slide 19: Maintaining Focus On Cash Flow Generation
Maintaining Focus On Cash Flow Generation1 Operating Cash Flow2 Capital Expenditures Free Cash Flow3 $854M $648M $525M $316M $329M $332M H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 1Non-GAAP financial metrics referenced in this slide include free cash flow. A reconciliation to comparable U.S. GA
Slide 20: Prioritizing Financial Flexibility While Driving Value For Shareholders
Prioritizing Financial Flexibility While Driving Value For Shareholders Over The Long-Term Reinvestment In Business Meeting the needs of patients and providers globally while continuing to invest in long-term innovation and accelerated launch cadence Dividend Issuance Increased quarterly dividend to
Slide 21: 2021 Outlook
2021 Outlook Second-Quarter 2021 Earnings July 29, 2021 21
Slide 22: Full-Year 2021 Guidance
Full-Year 2021 Guidance1 FY 2021 Guidance Sales Growth ~8% Reported Foreign Exchange (~250 bps) Sales Growth 5% - 6% Constant Currency OUS Caelyx and Doxil (~100 bps) Sales Growth 4% - 5% Operational GAAP Diluted EPS $2.82 - $2.88 Growth vs. Prior-Year Period 32% – 35% Adjusted Diluted EPS $3.49 - $
Slide 23: Third-Quarter 2021 Guidance
Third-Quarter 2021 Guidance1 Q3 2021 Guidance Sales Growth ~9% Reported Foreign Exchange (~200 bps) Sales Growth ~7% Constant Currency OUS Caelyx and Doxil (~100 bps) Sales Growth ~6% Operational GAAP Diluted EPS $0.79 - $0.81 Growth vs. Prior-Year Period 14% – 17% Adjusted Diluted EPS $0.93 - $0.95
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Second-Quarter 2021 Earnings July 29, 2021 24
Slide 25: Non-GAAP Reconciliation as of July 29, 2021
Non-GAAP Reconciliation as of July 29, 2021 Non-GAAP Reconciliations: As part of its Q2 2021 earnings announcement on July 29, 2021, Baxter presented its financial results for the second quarter of 2021 and the related year-to-date period. Baxter also presented guidance for Q3 2021 and FY 2021. 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 June 30, 2021 and 2020 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the three months ended June 30, 2021 included special items which impacted the
Slide 27: Reconciliation of U.S. GAAP to Non-GAAP Measures: Three Months Footnotes
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Three Months Ended June 30, 2021 and 2020 (unaudited) 1 The company’s results in 2021 and 2020 included intangible asset amortization expense of $67 million ($53 million, or $0.10 per diluted share, on an after-tax basis
Slide 28: Reconciliation of U.S. GAAP to Non-GAAP Measures: Six Months
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Six Months Ended June 30, 2021 and 2020 (unaudited) (in millions, except per share and percentage data) The company’s U.S. GAAP results for the six months ended June 30, 2021 included special items which impacted the U.S
Slide 29: Reconciliation of U.S. GAAP to Non-GAAP Measures: Six Months Footnotes
Description of Adjustments and Reconciliation of U.S. GAAP to Non-GAAP Measures Six Months Ended June 30, 2021 and 2020 (unaudited) 1 The company’s results in 2021 and 2020 included intangible asset amortization expense of $131 million ($105 million, or $0.21 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) Six Months Ended June 30, 2021 2020 Cash flows from operations – continuing operations $ 854 $ 648 Cash flows from investing activities (726) (758) Cash flows from financing activities (707)
Slide 31: Net Sales Growth As Reported to Operational: Three Months
Reconciliation of Non-GAAP Financial Measure Change in Net Sales Growth As Reported to Operational Sales Growth From The Three Months Ended June 30, 2020 to The Three Months Ended June 30, 2021 (unaudited) Sales By Product Category: Net Sales Growth Operational As Reported Caelyx and Doxil FX Sales
Slide 32: Net Sales Growth As Reported to Operational: Six Months
Reconciliation of Non-GAAP Financial Measure Change in Net Sales Growth As Reported to Operational Sales Growth From The Six Months Ended June 30, 2020 to The Six Months Ended June 30, 2021 (unaudited) Sales By Product Category: Net Sales Growth Operational As Reported Caelyx and Doxil FX Sales Grow
Slide 33: Projected Q3 and FY 2021 Sales Growth and Operating Margin Reconciliation
Reconciliation of Non-GAAP Financial Measure Projected Third Quarter and Full Year 2021 U.S. GAAP Sales Growth to Projected Operational Sales Growth, and Projected Full Year 2021 U.S. GAAP Operating Margin to Projected Adjusted Operating Margin (unaudited) Sales Growth Guidance Q3 2021* FY 2021* Sal
Slide 34: Projected FY 2021 Tax Rate and EPS Reconciliation
Reconciliation of Non-GAAP Financial Measure Projected Full Year 2021 U.S. GAAP Tax Rate to Projected Adjusted Tax Rate, and Projected Third Quarter and Full Year 2021 U.S. GAAP Earnings Per Share to Projected Adjusted Earnings Per Share (unaudited) The projected FY 2021 U.S. GAAP tax rate of approx
Slide 35: Second-Quarter 2021 Earnings
Second-Quarter 2021 Earnings Baxter International Inc. July 29, 2021