Baxter International Inc. · NYSE:BAX
Baxter International — Q1 2018 Earnings Presentation
21 slides from Baxter International's earnings presentation, Apr 26, 2018
Slide 1: First-Quarter 2018 Earnings
First-Quarter 2018 Earnings Baxter International Inc. April 26, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 financial outlook for
Slide 3: Table Of Contents
Table Of Contents Performance Summary 5 Financial Results 9 2018 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: 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 2018 sales and earnings ► Reallocating investment to higher-margin, faster-growing performance and rais
Slide 6: Continuing Momentum Of Key Metrics
Continuing Momentum Of Key Metrics First-Quarter 2018 Financial Snapshot1 Global Reported Adjusted Adjusted Revenues Operating Margin Diluted EPS ~$2.7B $0.70 ~$2.5B 16.8% 16.7% $0.58 +3% Operational Growth2 (10bps) +21% Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 1See www.baxter.com for informa
Slide 7: First-Quarter 2018 Sales And Adjusted Earnings
First-Quarter 2018 Sales And Adjusted Earnings1 Q1 2018 Q1 2018 Metric Guidance Actual Operational 0% - 1% +3% Sales Growth Reported 5% - 6% +8% Sales Growth Adjusted Diluted EPS $0.60 - $0.62 $0.70 Growth vs. Prior-Year Period 3% - 7% +21% Delivering Accelerated Top And Bottom-Line Performance 1See
Slide 8: Advancing Our New Product Portfolio: Q1 2018 R&D Milestones
Advancing Our New Product Portfolio Q1 2018 R&D Milestones ► Expanded surgical portfolio through the acquisition of RECOTHROM and PREVELEAK1 ► Received FDA approval of Bivalirudin in a premixed, ready-to-use format ► Launched KAGUYA APD system with SHARESOURCE in Japan ► Launched Arisure Closed Syst
Slide 9: Financial Results
Financial Results First-Quarter 2018 Earnings April 26, 2018 SIGMA SPECTRUM Manufacturing Medina, New York
Slide 10: First-Quarter 2018 Sales By GBU
First-Quarter 2018 Sales By GBU1 Q1 2018 Revenue Total Growth $ In Millions U.S. International Total Reported Constant Operational Renal Care $196 $672 $868 +10% +4% +4% Medication Delivery $436 $240 $676 +2% +0% +0% Pharmaceuticals $243 $253 $496 +16% +13% +6% Nutrition $83 $140 $223 +5% +0% +0% Ad
Slide 11: First-Quarter 2018 Sales By Operating Segment
First-Quarter 2018 Sales By Operating Segment1 Q1 2018 Revenue Total Growth $ In Millions Reported Reported Constant Americas $1,442 +5% +4% (North and South America) EMEA $724 +15% +3% (Europe, Middle East and Africa) APAC $511 +8% +3% (Asia Pacific) Total Baxter $2,677 +8% +4% 1See www.baxter.com
Slide 12: First-Quarter 2018 Adjusted Financial Results
First-Quarter 2018 Adjusted Financial Results1 Metric Q1 2018 Q1 2017 Change Adjusted Gross Margin 43.8% 44.4% (60 bps) Adjusted SG&A Expense2 21.9% 22.4% (50 bps) (% of Sales) Adjusted R&D Expense 5.1% 5.2% (10 bps) (% of Sales) Adjusted Operating Margin3 16.7% 16.8% (10 bps) Adjusted Diluted EPS $
Slide 13: Driving Operational Excellence Across The Company
Driving Operational Excellence Across The Company1 Adjusted Operating Margin2 Quarterly Highlights Q1 2018 vs. Q1 2017 Strong operational expansion more than offset (60 bps) +60 bps by Q1 2018 headwinds including foreign exchange, TSA3 income, and hurricane impacts Business transformation initia
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 Flow2 Improved working capital and Investment prioritization and Enhanced flexibility allows operational performance disciplined spending control strategic capi
Slide 15: Strategically Deploying Capital To Fuel Growth And Create Value
Strategically Deploying Capital To Fuel Growth And Create Value Reinvestment in Net debt to EBITDA ratio near zero1; targeting Business steady state of ~2.0x Targeting ~35% dividend payout ratio of Dividends adjusted net income over the long term BAX Repurchased $522 million or approximately S
Slide 16: 2018 Outlook
2018 Outlook First-Quarter 2018 Earnings April 26, 2018 Baxter Center for Spectroscopy and Imaging Round Lake, Illinois
Slide 17: Full-Year 2018 Financial Guidance
Full-Year 2018 Financial Guidance1 FY 2018 FY 2018 Metric Current Prior FY 2018 Sales Impacts: Sales Growth ~5% ~4% [Constant Currency] • Foreign exchange [250+ bps] Sales Growth 7% - 8% 6% - 7% • Cyclo competition [<100 bps] [Reported] Adjusted 17.1% - 17.3% 16.8% - 17.0% • Acquisitions2 [~100 bps]
Slide 18: Full-Year 2018 Sales Guidance
Full-Year 2018 Sales Guidance1 FY 2018 FY 2018 Sales Growth Constant Currency Operational Renal Care 3% - 4% 3% - 4% Medication Delivery 7% - 8% 7% - 8% Pharmaceuticals 1% - 2% ~1% Nutrition 4% - 5% 4% - 5% Advanced Surgery 8% - 9% 3% - 4% Acute Therapies 9% - 10% 9% - 10% Other LSD2 Decline LSD2 De
Slide 19: Second-Quarter 2018 Financial Guidance
Second-Quarter 2018 Financial Guidance1 Metric Q2 2018 Q2 2018 Sales Impacts: • Foreign exchange [~400 bps] Sales Growth [Constant Currency] ~5% • Cyclo competition [<50 bps] • Acquisitions2 [~200 bps] Sales Growth ~9% [Reported] Q2 2018 Sales Guidance: Adjusted Diluted EPS $0.69 - $0.71 ~9% 3% - 4%
Slide 20: Continuing Strong Momentum In 2018
Continuing Strong Momentum In 2018 ► 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 ► Strategically deploying capital to enha
Slide 21: First-Quarter 2018 Earnings
First-Quarter 2018 Earnings Baxter International Inc. April 26, 2018