BAX - Earnings call 4 2023 | Baxter International Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to Baxter International's Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, this call will be recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcast without Baxter's permission.

If you have any objections, please disconnect at this time. to call like to now would turn over the Ms. I Investor Senior at Vice Trachtman, Relations President, Clare Chief Officer Baxter International. Ms. Trachtman, begin. you may

Clare Trachtman

and fourth our welcome earnings morning, call. quarter conference Good XXXX to

Chairman today and Grade, Joe Executive and President Financial Vice me Joining Almeida, Baxter's Chief Officer; and are Executive Joel Officer. Chief Baxter's

could that by XXXX. full and and product we our be financial financial our And status with concerning of results detail Baxter's recent refer our chain quarter the more call course, for improving on differ our everyone actual With let in quarter start trends fourth reminding this contain for the me that that, regarding for outlook our our and business of the approvals, presentation, including remarks results cause On SEC including development, filings forward-looking year comments to will and status customer release differ spending materially actions, supply environment, today's actual press to this macroeconomic the first pricing impact capital prepared along and uncertainties. regulatory of materially. financial our statements impact the that development and morning, risks discussing pending ongoing and could matters commentary expectations. Please conditions regulatory new evolving factors full XXXX potential current from and strategic results outlook involve XXXX, including year

along which comparable this earnings non-GAAP both measures financial being the ongoing our included measures call, GAAP issued will non-GAAP our today's Baxter's of the are business website. release morning, investor the help accompanying is today on addition, available reconciliation understand to financial discussed on presentation, in used A with In measures be to performance. investors financial

Joe? I'd to Joe. over turn the like to Now call

José Almeida

this, the everyone. and with and I who transformational the Clare, of appreciate turn our After morning, will just Kidney laid Grade, the the detail. Baxter's business. more brief you, you I Care including separation quarter begin overview planned in out ago, then a year good actions our the our progress will outlook we will time to performance against join for for year. walk through to you it over us. and results will taking review of Joel We over Thank a I

Finally, questions. open we will for it up your

As you our in quarter top coming strong fourth line for and of exceeding projections saw morning, end this high our Baxter reported guidance the XXXX with the line sales of bottom range. performance results at

a quarter. a divested biopharma As of impact ahead at continuing reported we ahead our outlook the increased to X% constant basis divisions our projected X%, of our the by exclude basis, X% and currency medical which guidance, with Care. growth. of operations on also On close reminder, better-than-expected both solutions Relative therapies our continuing operations was a sales broad-based of business, of expectations, of offset the the X% which expected Kidney third the a slightly Sales of from products [indiscernible] year-over-year quarter in sales. approximately growth care therapies to reported in and systems technologies, X%. Strength which growth chronic in was and pharmaceuticals, decline an and rose health

of operations adjusted line, at $X.XX. guidance continuing at bottom per to share our $X.XX came top the from of in earnings $X.XX the range end On prior

on and focused during in chain supply our of the outlook, our further XXXX. results reinforce light quarter building environmental In challenges financial consistently exceeding meeting fourth particularly and/or momentum. we Our XXXX, we macro encountered significant

off us foundation course focus, we this to in of to with solid this XXXX, to XXXX. sequential we As over were deliver build a able believe and improvement provides every the testament quarter, performance a

sales growth a year full sales on constant constant reported billion of driven basis segments all advanced $XX.X of X% the on for and a by our X% from to Turning currency operations currency at continuing rates. basis,

First, and rose portfolio sales therapy X% X% Care and were and quarter our in the by comprise for both for Performance Baxter the our looking X% the were in year. future fourth Products quarter the Systems Pharmaceuticals in execution set growth Medical & in sales year, commercial segments both was the for to Kidney filled the X% currency Technologies constant teams. manufacturing separation. quarter strong the the planned year. up and up sales across these Sales and and following segment the at in Healthcare in

increased New more respect still may significant are a spending, experienced stable year. With product of by the experienced environment encouraged to our we in softer Solutions supply Care spending, the to sequential and last Connectivity hospital of capital every there improvement within and the pockets component and XXXX launches volatility while we relative we be electromechanical quarter chain availability macroeconomic division. believe

Care in in which called the constant Our mortality seeing the the in in Acute offset growth flat well government earlier based and the was the declined procurement are the the business we continues grew X% building sales in reflecting Among key sales impact growth of difficult initiatives to quarter patient discrete renewed peritoneal due the due to for Kidney evident. and post issues. a lower underlying are Care that chronic pandemic-driven of pandemic. The separation, we patient state to prior year segment, growth population as items sensors due year-over-year momentum year dialysis to at indicators, the of will be Therapies impact therapies, the Vantive by benefited comparison in China lower is X% rates. Strong Kidney and improve certain as following

Kidney hypothesis ever. and independent as as rationale remains an strategic Our Care strong for business

year. executing gearing this a successful up for separation Our team and is

as Given both ahead and Baxter separate we prospects look [ ] the overall for environmental as to I'm performance business dynamics, optimistic and Vantive entities.

achieved kicked transformation. to position to and of our Since for financial the against with operational the We by businesses scope performance patient Our loss separated XXXX. enhanced who and a a team goals of a led globally shareholder the Vantive profit and has business priorities and we delivered is of realigned a by to our velocity executive inclusive Baxter into ] strategic rethink on on development, functional and and of commercial solid year [ seasoned new teams. announced era model efficiency parallel then, innovation. We an range progress supply clarity, segment was meaningful operating open newly with off in and impact, knowledgeable urgency both our and simplified strategic manufacturing, Each accountability, based research integrated segments. streamlined heightened dedicated enabled executing chain

biopharma of the which close our greater growth of strategic capture on us focus further already benefits to business of are and improved We streamline line to seeing opportunities. We solutions recognize allowed at sight businesses. QX, agility and the our divestiture our customers the to core of our completed

after-tax repayments approximately fourth We in $X.X proceeds are billion in billion line down our quarter. capital stated $X.X debt of the pay the to the in including process of allocation with of utilizing priorities,

[ to continue ] out we of Baxter. progress make Finally, store Vantive separating

CFO has performance patients. Chris milestones customers of hit As and his long-term of [ JPMorgan at made Among financial CFO. work you believe Chris customers has initiatives days commitments developments, the and never a IT while to his may Harbor priorities. and we separation chain renewing onboarded key continue Vantive operational, hard Chris supply significant ambitious this companies on unique [ you summary, investment setting coupled legal, strategic from Matt Many Many meeting as pursue designated focus and with we the empower slate own last have domains. had opportunity XXXX of stated, consistently we solid at NuVasive]. Meanwhile, been to as CEO, across [indiscernible] the strategic strategies. In was rebuilding Matt ] near-term building our of know regulatory, organization, ultimately recent out conference our foundational our meet month. momentum. and We their an progress on losing Toth separation to will both year to

I to potential the to the created a achieve could embrace been year, achieve seize granted, not take in have we created past to work this together. I'm to do a come. and potential have have year us our all objectives. Additionally, helped team who by we hard recognize our a and and energized that opportunities I impressed why by employees on more of never so for I is to single what exciting of opportunities want accomplishments more thank commitment new

Joel well as Now as a XXXX closer it our at for we look over to our performance XXXX full year turn outlook. and fourth quarter

Joel Grade

performance, Joe, I'm fourth as to on and on financial morning, morning as well happy full XXXX. outlook call Thanks, everyone. good to joining for this commentary details financial be our provide XXXX quarter year and additional the Baxter's some

on and a business X% increased sales a previously of in with in are our reported particularly results, categories therapies to As pleased approximately of on currency. fourth Fourth and in step our Joe constant billion many basis another and transformation. in which forward reported sales X% and basis X% represented guidance X% mentioned, better-than-expected to X% favorably ongoing currency XXXX quarter chronic our the global compared Outperformance compounding. product quarter and drug quarter $X.X benefited constant from issued we

these comprise growth the X%. sales therapies. X to will we health which prior Baxter compared and reported As and for medical approximately pharmaceuticals businesses, care technologies, collectively, year the increased period, And in separation, post quarterly solid systems and products

in Kidney slightly expected, earlier. due mentioned the to As Joe Care factors declined quarter the sales

from the recognizing XX% programs. team expected in foreign versus reflect per $X.XX period. totaled operational performance. the prior the share, that primarily to as by exchange quarter our driven year better a line, by margin higher for bottom also the sales $X.XX we successfully its increasing are range operational end on well high network and earnings at and ongoing impact results year. Adjusted tax expense contributed partially our a within favorably benefit both compared executes Lower came quarter, of offset of commercially interest share as to of the as to supply the rate On share, improvements earnings per adjusted the $X.XX per the These prior chain improvement

reportable Therapies billion our in XXXX expectations infusion strength in our totaled our Therapies solid Full Now advancing outside X%. products segments. performance grew segments were and IV from totaled increased and growth walk $X our at quarter performance system in will million and reflecting Medical benefited in from our X%. internationally. and $X.X Commentary portfolio. X%, Sales fourth as Sales Products of from Medical rates. $XXX growth and Advanced quarter I'll well sales in reflect as strong currency coming portfolio, and X%. also Solutions Within billion, by regarding Surgery sales constant Infusion through division States United growth Sales the year sales totaled therapies, ahead Technologies the billion particularly $X increasing

in totaled sales $X Full XXXX Technologies, $XXX billion, million and HST Systems X%. year For the X%. quarter were sales our advancing Healthcare & segment, or increased

product XX%. increasing benefited Within and Connectivity all in care was or the first improve growth in in offerings. the the categories revenues. Fourth care Growth communications, double-digit our CCS States division, also HST million, rental quarter quarter a lower Patient CCS basis segment, continued by notably but from product and Support in for offset surgical our division partially key contribution orders within the $XXX Performance Systems year-over-year sales on to the quarter grew Solutions, including or within solutions in United time XXXX. from sequentially,

we've in of sales we X%. the to from Line be $XXX spending were While capital quarter in pockets increasing still we million, cautiousness are select continue customers, U.S. there Care improvement our believe hospital encouraged the by may the in marketplace. Front seen

more and improvements exited XXXX, we're X%. successfully Pharmaceuticals in to availability our levels. segment $XXX of course the the normalized increasing component in were backlog million, at our over address electromechanical able year the elevated Given Sales

through and reflects contract directly the line as the quarter, certain portfolio volumes were products continued level injectables U.S. Performance our declined reduced of segment as were royalty drug strong manufacturing X%. advancing sales within facilities in portfolio sales, demand a of internationally. Other well and for driven of our our XX% certain primarily double-digit million by of sales during quarter expectations. sales demand in the with $XX sales For also in growth termination arrangement. not and include year, to services and a new services billion, reflected which manufacturing launches represent $X.X product our lower provided This allocated our compounding full for the

therapies Full the Moving $XXX increased year items $XX to X%. Care. sales in better discrete for totaled declined a chronic in sales the earlier, the included growth declining and Kidney Sales Sales quarter Care, comparison was in quarter $X.X U.S. though billion approximately to impacted came mentioned period, in the global $X.X than which X%, on were million. by Within XXXX as Kidney year expected. that X%. difficult prior were million, billion totaled and certain

our lower due by by estimate impacted initiatives factors negatively the be and across million in representing growth pandemic. to following continues country-specific census that United approximately in collectively, certain impacted government-based the in growth in business quarter. Sales most therapies States, benefits business sales to chronic X% China million, the Therapies pandemic-related experienced. in now performance including Finally, the these we've regions, were We lower where of to $XXX procurement a Acute double-digit rebased with due strength we previously $XX this patient sales

moving P&L. Now the of the rest through

negative as XX factors margin supply materials, Performance basis XX% enhance transformation adjusted from and integrated higher in that in represented basis for or ongoing chain line increase overhead million year. the in prior $XXX a as of compared marketing prior ongoing an was versus the the quarter with period. percentage slightly Adjusted top year-over-year totaled and bonus of sales, in driven quarter basis previously and for accruals Margin Our pressures an operational spending lower-margin quarter inflationary improvement divisions, higher million, XX by prior annual under investments SG&A XX.X% over gross and the improvement primarily and to incentive totaled year. from that benefited efficiencies, stabilization our of and improvement increasing quarter versus percentage in The our the our the to the margin points gross profit in year. raw and the sales, totaled of represented select macroeconomic in research of gross compensation points points was margins contributed X.X% prior line expectations outperformance impacted by increase our the quarter select reflects cost offset a to drove and initiatives the quarter. a employee network. Performance programs development plans initiatives $XXX year in XX also the benefited our in in margin initiatives. Adjusted the sales which markets pricing mix earlier as labor in year,

$X.X decrease year ramped proceeds year efforts, of to accruals the the continue to compared was interest million in include divestiture. compared increasing the expenses lower and, half products an prior tax offset $XX increased to particularly in prior prior as have investments quarter. We expected, in new Year-over-year the primarily period. the Net primarily by $XX and compared as quarter sequentially, like advancing up the second the improvement our R&D as the with $X.XX year incentive adjusted stated points prior portfolio half consistent XXXX, efficiencies billion interest our our across largely the earnings a year by in R&D driven employee as rate prior other than better-than-expected came SG&A, higher in mix. to margin the is of as with well operational in geographic million points. Overall, improving of period. impact the an XXXX. able we down basis operating realize as XX% with XX.X% exchange certain on period. tax sales to adjusted approximately driven previously the allocation of in We foreign with primarily margins due changes and half in benefiting period. The in lower XX.X% the increase the expirations expense, margin XXX in by repay very expense factors adjusted in nonoperating of associated and with $XX tax And incurred expansion the in in quarter an utilization of versus was year, year our resulted totaled positions compared income the capital BPS debt repayment basis totaled partially the the year and to second priorities. Adjusted to earnings These rate million $XX by of quarter are versus tax The we're XX driven debt operating totaled million The $XX period. losses prior pleased first statute rate the compared the year increase year-over-year XX.X% of of driven prior million by mentioned, plan from approximately expense the to quarter, higher

billion Baxter's by as accruals reflecting cost bonus per previously from For of the full to impact of discussed, the sold offset compared were decreased year, driven increased the These the our partially greater the million environmental macro annual higher chain continuing XX% $X.XX share, initiatives. With primarily in to we cash factors nonoperating as factors diluted operations of adjusted we goods and savings $XXX earnings employee well flow, from by operations cash generated to expenses. $X operational free over for year year period. supply prior respect continuing flow

working and, consistent is were while full building capital value the also it team. To our enter our XXXX. both me with stakeholders. in key flow improving to designed is close momentum. XXXX, both as to particular, pleased priority strategic generation all Baxter building progress performance are forward, metrics this drive year We for performance our incremental enhance important And which initiatives on to our we and and able for cash look note momentum progress on reflected teams and operating through our Going making that our future a performance against we positive meaningful to achieve that forward results,

our discussing key Let XXXX, guidance. quarter my assumptions including underpinning and the for remarks some the full me conclude year outlook first by

approximately remaining follows: sales Baxter increase our primarily of therapies, X% on to pharmaceuticals X%; sales both growth and XXXX; compared year connection reportable these growth expect be from negatively million. to to X% product basis. select currently sales to in approximately X% for X% $XXX year impact Technology year expects for to Systems by sales X% exits this expect XXXX. Factors full for with Kidney full a expected to foreign segments in are to constant impact and for driven and guidance Collectively, full our currency expect are market growth as X%; are segment sales of currency as increase sales Healthcare impacting to sales by sales as expansion segments expected businesses is to of Care, which we X% total Constant by For we on we expected in the for medical growth products Baxter is XXXX, decline exchange initiatives reported will we X%; growth estimate minimal X% basis, the a year-over-year margin and

government expected ongoing procurement from is million XXXX. impact in incremental $XX the the initiatives total China in approximately Additionally, to

P&L outlook items. Now for other turning to line our

adjusted in by increase XX to We operating margin least at expect basis points XXXX.

We expenses, nonoperating expect [ a include expense approximately rate point implementation basis the the approximate expense income interest rate which tax to between total our of an million in net to which and full tax year other $XXX during X]. We and XX.X%, impact XXXX. XX.X% and from aggregate adjusted Pillar XXXX XXX reflects anticipate

on We the X% expect XXX full constant Q&A. we a million $X.XX we to $X.XX to X% now our of currency these and per all $X.XX basis. quarter first to With diluted share per the and share. to open share. diluted slightly excluding average can XXXX, X% shares factors, earnings, for growth on of year. Based we sales special expect excluding global special on basis items, earnings, count $X.XX that, up of the anticipate a reported year for approximately And call adjusted items, adjusted of expect Specific increase to diluted we

Operator

possible opportunity would the everyone's now Instructions]. ask We [indiscernible] to of you session. to as question-and-answer question. like patience a [Operator will as provide the and many begin

digital at is and will Baxter We available for this for replay will like the call remind is participants be recorded, International on days that www.baxter.com. would list while compiled. XX a pause a to website I the moment being being

Bank question of Travis Securities. from America first Our of is Steed

Travis Steed

the the conservatism the over on about improvement maybe think you revenue both I'll and margins. where the go then there And is XXXX think One, look how like year, could upfront. course of really mine second to sequential when to be could about and and the ask every guidance side, on that quarter 'XX at the the to revenue ahead some improve talked of of the built through the areas cadence year? question of some X%,

you guidance. inflationary assumptions Curious pressures on about that. margin the what If XX underlying basis point like of think the FX and are and some stuff

Joel Grade

the is this Joel. call. Thank for Chad, you

I'd say I things. guess of couple a So

First momentum of all, good we about feel our business. in the very

we -- think I a quarter. had solid we saw a fourth

of overall, that that And see, this as with year. are some revenue I the results have think We guidance X% think into growing pleased about of the Kidney if have, we our the X% talked you that forecast. is you business we've outside to about we heading

actually if exiting products. purposeful business Kidney you about about there's We're of markets. With we million think that -- that, itself, have $XXX we're about actually exiting

over you equation, And if which that that we're again, so into number think for the is X% year, up actually that factor I great.

about couple and actually guidance of with some XX by I that think actually our good leading we the margins expanding said points the we're sales strong we're growth. feel you really that a If performance about over -- full basis fact year EPS that. itself, double-digit to

that of big the puts are piece of Now I pricing, is the And operational and on the again, -- there things assumptions a that so from part key have think the main on margins. what the main question of the that. improvements think from some cost in asked in the you I some margin volume. that There's also of side, takes you the you asked,

about think again build feel in on those had. to the good all we we've opportunities I momentum areas,

sales the QX, in momentum If a our business, perspective remember had do we quarter, with as last you anticipate we HST year into that the the from well. pleased in and heading we're very

good but of any I'll pause there stuff there, for lots other. again, So

Clare Trachtman

I'll add or little in just Travis. Yes. a -- little [indiscernible], add sorry, was my I'll a here. I'll in bit That -- fault.

think acceleration see shape the half in in we half obviously, expansion, of sales second comp I margin the will growth. But on that the you'll see P&L, just see going -- to relatively you be in think similarly, will if say second margin the first see terms the slight are of you'll given more would expansion just earnings than and you year. I cadence, half, outsized about the of terms in So of the some

earnings So first in be growth strong. year very half of the the will

Your for was basis year, is about FX on on a margins negative XX impact the Travis question FX, basis. of points an our operating on year-over-year on margins

Operator

Robbie question. Marcus JPMorgan of has a

Unknown Analyst

I and bit for on Allen of quarter the some of backlogs. the given is strength. first at some that little fourth of of a much guide. also you we some forward better why the in I a the You question Was This of what about had comp, But to sales drove up outsized there pull aren't How you realism? Robbie. expect talked number just growth of conservatism we view start strength the softer able this looking versus that quarter, is on quarter into quarter? recovered put that how saw at first year? easy an of a any the the as

Clare Trachtman

Yes.

the would I course in the is ramp quarterly business, biggest of over sales one where what do year. within cadence of say probably HST our So drivers the terms the is of

we what in to XXXX. similar very So saw

accelerated see will business -- half growth year first the of of the in second compared have year. You the to our as half growth HST the

of the one probably guidance. drivers in that's think I terms So first quarter bigger of the

José Almeida

And continuing see from into XXXX momentum are XXXX. also, we to

we feel the about momentum So QX got in QX. into going optimistic cautiously that I

QX. on launches. whereas product also, And a Of you are have we're have can that factors different always I throughout we at guiding. growth, when based the some we that demand of course, many we comfortable the market with tell look year, seeing, [indiscernible] But feel we the very we

important ramping rest in also, our They're to launching QX. for we on we starting pharmaceutical. the molecules will XXXX. in the -- XX that and is very year quarter well And QX, have boost QX closing throughout accounts still that do some also We see ability of are there this that we

Unknown Analyst

Got one. it. quick slip in a I And then could if

of bit You in talked Or little about to you continuing assuming the pockets course you weakness. continued capital improve are guidance? the XXXX year? of pockets the over of you expecting basically are for weakness? -- that normalized Are equipment of having What environment the some a

José Almeida

slightly are are system large see assumptions to of QX, rates our capital Most softness -- QX. of improve. see smaller going medium to continue in always we're in but systems. There We Remember, to large like that, majority is systems and into QX, saw that high still going interest to QX we and recovering can feel are for primarily of that smaller end of capital are completely into the systems. from in comfortable beginning recovery a and in the -- in very we our the see of really we're affect But 'XX. what those starting 'XX customers, XXXX pockets when

Clare Trachtman

year-over-year year-over-year basis. Yes. then saw we CCS prepared a business And XXXX just in to I as on our this kind fourth remarks, trend in basis. well. And our Allen of see in ], we quarter, a mentioned on see orders the as And similar year, very we orders did up our orders [ that. for capital sequential think within quarter Similarly, to to will improvement being a add on every leading up

So we've this seeing improvement. sequential been steady

to as so XXXX. momentum And on into we build that go going we're

Operator

the Matt question. Miksic with of Barclays line is a on

Matthew Miksic

Can you okay? hear me

José Almeida

Yes, we can.

Matthew Miksic

Great.

old results -- [indiscernible] the here the So the on and I solid congrats had pickup in business.

in Any a would maybe also that sort the you the business? a should around time? on used on systems could I So to of and And that contracting is just driven. front the a business. of recurring revenues I to -- some to just extent history there being that But of we're capital think with question seasonality have that if driven, business. And of that a over Or starting color -- mix super I'm helpful. mix connected recurring change in increase in see be that you're revenue that the wondering, see care of we QX

José Almeida

noticed, there. a see of money we terms to, through in the bit important they try with that our strong strengthen -- are as of gets they start -- more then think We cautious We And things quarter. our in a the you always those as much Baxter, for possible, hospitals create get because the focus seasonal growth little they done quarter. I have more spending less have have and year the it in first the So culminates as fourth usually And lot as we seasonality. quarter, in the first a happen. one QX the a seasonality, program beds but less spending

starting large as is some to can continue conversions incredible hospitals. we're go and When accounts get we We one to Baxter together, and for some bring what company for success Baxter there. do

feel is things in other a are account. penetrated, get accounts Northern starting kind that conversion that, to full can saw partially early with that kick in we launch have see. and that the momentum going large accounts XXXX that this We into we of that with in we blow So Cal we Baxter that

has So always for that rest a We the of this offices is business floors. see med The than revenue reason Front lighter a Care The is than quarter going. But terms that with first more is good less a CCS year. procurement is under search it's HST. the in consistent and momentum much into seasonality quarter doctors' the really Line the business of that in monitors hospital can Baxter.

growth XXXX. So systems business points you successfully as above solutions, our in IV has driven can that seasonality. A business, basis as solutions. well been brings is tremendously see very rate, less its as XXX which that MPT market is infusion growing, predictable by

hope your I business answer question. to more that brings quite to that repeatable. less was So seasonable, I able a

Joel Grade

on that I'd the going say, over the could year that the thing way ramp think If year of to what sequential over course is Yes. see, a I mean course in up Joe business. bit to I just think business about HSD just of add I that. said to the one that we're the

going in that's little -- somewhat bit I to the as applicable again, segment. to going you're sales be think a that see, of I mean talked earlier. to there's So going a ramp to and be particularly up Clare that

other in XXXX sizable had The backlog. There's Front say, would part growth fairly first of business some a I bit they recall you an as year, that through during amount Line thing last just the of on of Care well. of as year headwind the work a early the

[indiscernible]. ramp-up add want So again, is that sequential just in to business

Operator

with question. Kumar of ISI Evercore Vijay line the is on a

Vijay Kumar

to talking below [indiscernible], but right? environment, some a number, business my X%? High of of Kidney ex the I at should when that is peers Care. the Joe, order X%, why at still I strong. When slow ] utilization was that the look ] in around for turning reasonable look [ Kidney level Like maybe first I are your When at in Care. to X% one-offs look legacy what is capital Baxter you. ex about. business book just really business, Are there [ 'XX? Hillrom X% that's down any Why X% to X% one QX it's fiscal

José Almeida

pharmaceutical be on the for growing Vijay, high above that market let have X% but going above business go points give business there, What business. that? still X%. pharmaceutical have, all, to We basis it. expect erosion because to a its price in is We end still punching XXX that we first to X% guidance. of you me perspective of this rate breaks growth has X% on It's this be to

Our NPT probably X% to and opportunity and is going to X% go the that. with be above between

end of of going HST? launches Now in, becomes have 'XX. HST. the We is 'XX and happening significant amount What in

We monitors. new have

and we device cardiology new on continue successful Progressa+. be have to We

communications, a their in So have can to launches in new of There care is 'XX new Line in in to new which get we as versions extremely plan has growth this ] X communication XXXX. to growth to our infusion has between in that device XX% be 'XX well then and do year as than be systems. We're because for a launch Not infusion will CCS rate wireless MPT, -- Front Voalte. to with versions going that X%, our to in going new continues difference XXXX. the Care launched is is It's of [ now product to primarily -- to be making new X% it you already the is for our with to do pumps. see well and products lot pharmaceutical

So monitors, we drive going what's is X%. you that And cardiology. do to above That execute go well, will wireless if it. communication business to

Joel Grade

we How very share about opportunity say about for, businesses. lot think we later about about us this What about hear I of business to event. we year, talk in how -- you separate with talk think is going to think capital too, high portfolio we -- the think we having market ultimately you're again, products have would also the allocation. if because on about investor an and a the the as Kidney

again, later of the capital about opportunity so on. really the to about But thinking our the is to to And of we're going the focus is accelerate actually Separation part growth you're something benefit that that's talk kidney. accelerating there. the growth on ability allocation the to levels

Vijay Kumar

a versus the inflation QX? and What in the sustainable Is number? step maybe still And on payments. a expense interest is What guidance price that one to You sequential down margins? headwind inflation Understood. didn't note -- question. is debt is then

Clare Trachtman

year. So you start It year, then on similar. a the in second the we'll in it's I'll want is the say, likely with --, in and interest. the bit up Vijay, half quarter, say, I'd little probably, me of of up would first I the What steps first probably half second step interest quarter, that to

down We planning in debt pay are low coupon second some to the quarter.

-- the we're earning now, cash And that so earning we or cash right on some interest have. income

second will the that half of year. so go away the in And

So second you'll of that's expense year the why to as half. a higher a the of compared the in bit half interest first see

Joel Grade

obviously, use for, the later the of XXXX some the quarter. And debt during Yes. some particularly of about. mean, debt at rest we that -- coming sale we that some proceeds talked point in in fourth we that the maturing time. address again, down that's And in after $X.X tax from have of of have we as used actually debt will the we debt then due Eurobond of got $X.X [indiscernible] to year actually in of we'll paydown, that I billion million that on pay the EPS, the Again,

Clare Trachtman

environment question, overall their of is say, other your earlier, kind program. referenced to pricing. improvement just and then is this I team on margin the executing and integrated on And would we chain What inflationary that supply our

positively so the generate and contribute will margin year we our programs And will to this savings expansion. those

we any more that inflation sort of So they have. than will offset normalized

this will benefit getting be we a pricing are addition, In year as well.

Still So those those those IVUS as well, as for be positive our of we after price businesses in year are are targeting the all going getting well. pricing pricing, particularly well. all of as -- all we in will are of so markets of markets

will a X all of you the is kind of the side of positive those because pieces, is rate of what I on that terms on see of that FX. Pillar increasing. interest, non-op tax on would but In our We that you have say implementation did comment

the about we of on margin. some So negative FX. kind have I it talked operating being

on couple for negative the cents in a or So not year. of impact is all us probably

Operator

Deutsche of is a on Chickering with the Bank Pito line Securities question.

Pito Chickering

those where Joel, like fresh that Can but for you've seat been very most I us walk a you in set of on the think margin long, you eyes or to just upside of in years? of operations Baxter. think take And the want sort is areas the any cost do several to you that next the to like [indiscernible]? over need reductions other you what hit procurement

Joel Grade

Sure. Thanks, Yes, question. continue think the group. biggest I in that doing work supply [indiscernible], perspective our chain is Absolutely. we from we're have one of margin for opportunities independent the to the a

good optimize our around enhance designed and things opportunities. margin a team procurement really specifically improvement abilities. we logistics They're network the think things got around lot automation. do going around that the has our They're -- about we are of how designed continuing things how I like like do of some around programs

the again, to, as -- has good of the off team that's some in sit over areas think start that again, I on that. most impactful the and really are time a space, that gotten

talk point, heard that of the the ability the fact I continue You've inflationary that. fall to. just those But they've I your continue work think expansion we some see the done where that a pressures offset has to to categories as out, place coming gotten to referred some to the us Clare to that margins, have we of about into

will I business. other to you heard like this of this cash a prosperity. think But what think going of that we continue part -- across capital. question, do focus on we not SG&A know going things we're opportunities services I for already. nonetheless, environment space drive working improve there operations some to allows other in we use piece actually is of around not of still is say the is cash of do a well How that are execution me how the improved but shared about do And ourselves an consistent heavily to We're again, conversion the we as our -- how margin to a to our to that continue cetera, that growth. I the was And to area how want question where again, some continue innovation, to is all ratio leads know around that's accelerate to that we some our back et in what company. do of specifically continue invest for to to asked. we that call continue to into back reinvest -- cetera, grow, the allows see development. a get again? around to the product the is opportunity earlier, et That's you be and not what flywheel I I what to to asked grow, continue But then that us to that's us business which going new opportunity. And

Pito Chickering

a margins you here segment a XXXX. by opened XQ then follow-up, providing for little for level Great. box Pandora's And bit in

And their question XXXX? looking ] [ to we're to you're for market of what on is pump Can sort and possibly compete each then be XQ division you here, out the rebuild against pumps models. margins quick for pumps in for going as break Now seeing you update share Novum? next-gen how any and a

José Almeida

first terms looking to approved. XX-plus share, share. growth nonetheless, market our we're pumps forecast. start This do Spectrum year. to in versus Clare of continues KLA a great Let great then pump, the Sigma question. your we continue market to have for our a to with in forward our get year, we we advance going is That percent honor. pump me and got job the pumps awarded part That's answer Yesterday, our Novum which of just is best-in-class But last

that continue award and to and now pump seventh to share received is we well, continue was since it gain we with a launched. market So award to pump do nice our the to that, forward look

back Clare of answer first your now So part to to the question.

Clare Trachtman

are actions of give our Baxter business. guidance, and within segment. that both But all aligned point total obviously, the one by Pito, the margin is XXXX to margins. we aren't Yes. I Pharmaceuticals improve in of going would that The terms caveat segment our operating out to

divest aware, year. Solutions As business we you're did our last BioPharma

now will impact the a the year pharmaceutical result, have a MSAs, on we've negative as total into into margins so on some margins And obviously we as Baxter which entered for the MSA. entered and

So you margins. the impact see pharmaceuticals that in will

Operator

Wells of question. [indiscernible] the a Fargo line with is on

Unknown Analyst

thoughts and didn't It's your I it. calling status on of Did have miss I in a Novum? [ potential to I sure [indiscernible] follow-up. you make for submission just 'XX? on Larry. in Lei comment And ] want approval the

José Almeida

FDA I on details, questions don't comment questions. There's we that to didn't you the of tell can the usually is with on submitted. the answer FDA. was all that their We behalf documentation anything on we answered. comment and other be All the no

We nothing I their So is feel for before final a now as all cautiously else make I this is this. But us so the optimistic on at I to about as to because said month do. there said decision always, and ago. questions. side a or answer

SIGMA be for great gain there -- 'XX market continue So thing. that if will be happened in share to SPECTRUM. a we Nevertheless, will

and an best-in-class with we that new pump, very award be busy to competitive accounts, a happy, and quoting for said accounts continue actually which very we're are that I before, As we and got we pump. just winning

Unknown Analyst

'XX. on just said X is about And the what follow-up your Got in expectations my it. for segments -- you

itself, the China But normalized for this of X% once kind ex term? term? to that Is longer the it you're right that to So to is single-digit look at low similarly, longer in to the X% business [ Reno], to year. Renal does X% look way expecting Baxter you decline the And -- in way exits expect you adjust growth. right [indiscernible], at X% renal growth

Clare Trachtman

Yes.

think for We said And is growing ahead average weighted that introduction market our -- and to expectations but mentioned to while going goal the go earlier. discuss have Day business. I'm Joel of later new back both where we through I have Capital Markets growth X% continued grow Joe Lei, we're our something to our that So X% to long-term rate. expansion, the year, products, a Joel that, this plan market to will of

to So want of grow that. we advance in do

aligned I growth our business, so post say to be Care, that would to our kind $XXX million longer respect off term. separation. But of And of yes, goal is accelerate we'll of enhancing goal with business for that. With of we all made to again, exits Kidney profitability no, unveiling that those

that business what as think ensure want for this that success I to up So we stand-alone is a entity. we're setting

the also procurement. in fundamentals a seeing some I the think the have value-based that We our rebound business There in be But might We're for We're patient that XXXX. key to seeing Acute growth. is follow-on are this Therapies solid improving. business.

grow adjustments. So off I at will that once we're levels we accelerate can believe the -- this make levels seeing these the business that

Joel Grade

would I markets, you And exiting products. just -- purposeful Yes. -- decisions the question again exiting make asked, around the did we

yourself million add digits. so find in single the low could I $XXX that think, is And we the you to you growth a actually yes, back place a earlier, -- that where referred actually in from there's if

Operator

Matt Taylor line on is question. of with the a Jefferies

Matthew Taylor

contracts noted your expectations bigger talked that about I I past any comment noticed and of pricing. to wondering et that could in your pricing if those you've in in dialysis, 'XX. some updates know solutions, on nutrition, on some the on was And you progress for cetera. opportunities you reprice

Joel Grade

Yes. Sure.

in progress So we pricing XXXX. make in did

And a areas that with is contracts things in think XXXX. them. -- I continued made the actually continued progress signed, as on about just the kick we've of talked we've the we've That of fall our that But part pricing was that that off the -- temporary some and nature of is expansion here. sense we will margin that of we growth do our in some were have to in had end doesn't some that the reminder, until of XXXX, the of at one And year in pricing. adds the progress in GPOs again

XXXX. to about give terms solid So progress just pricing do customers. that continuing to in coming in have other that's pass our again, going we the to terms you And not has to take what within thing would world indexes ourselves done to a in of that we're is an actually progress just pass are flexibility we've talking part to cost -- to of of say progress. But I Again, team allow struggled made of well. the the that more area we're that, of pricing along of to in to remind good into our even are making historically that that our us that continue as to job along better opportunities job have

focused talked in operational to again, really on continues is some in work our XXXX, also, about, we the further doing, progress as speaking, and beyond. that pricing XXXX but margins that Clare look of generally and our we're accelerate So expansion

Matthew Taylor

on follow-up. more have get? year? I I the contracts? can comment So talk those order some a to kind of when going of And of what's all at hear throughout you of just opportunities about magnitude the you we contracts, could you mean the bigger about that can Are pricing ask with the you

José Almeida

great middle signed, underneath making We're IDNs us do for on that. are progress. steps to secure the these contracts And the next of We them. in well doing it. are to Once the back

We to poised that take action. are well

of of dollars. of we the the We signing are status going feeling today tell signing these exactly to in quite them for competitive comfortable volume terms agreements. neither We're -- where are where reasons, not we are

of important size value. our with plants. volume. achieved need is That line you this and us, think the pricing Value So as to value. bottom is profit is will dropping about to the be Volume to

is the So thing we're getting us. a for of both important combination

we had So of in of the our course. XXXX, always amount is headwind focus price because important that

So We've capacity. are important to well. expansion well as we very of us that, market been have we share serving but market because considering also is the

our add getting by the significant in XXXX to about to line in potentially contracts we think continue but position. good XXXX bottom those objective signed, are and value into So is to accretion

Joel Grade

going the Joe And specific details or pricing not referenced. on to volume, as give we're

think ultimately with the progress volume inclusive margins make as growth just be that we that about guidance those and we'll will So give of on contracts.

Operator

line is with question. Danielle on a the Antalffy of UBS

Danielle Antalffy

Analyst inorganically once Day. you at Baxter the And Joel, organically be perspective? think to you a But improve focus curious And an most the [ Care? the focused from behind? pre-spin and we'll just ] a whether most or just where what longer where investing quick years, of Kidney more color term, Joe just question level, opportunities longer-term high few will R&D some see and here post about the on get [indiscernible] assume have sort we is I next

José Almeida

the value -- inorganically and we're and strategy significantly so and advance organic the all side the innovation, our participate So of operations organically as that, Danielle, of eventually as all about to our of value is we're the that back and the thinking that currently acceleration that doubling Baxter company. to in in multiplier plants well expansion aspects office. all of in as don't we is the well, in areas drive excellence innovation, intrinsic footprint commercial of the to do our of -- of this from down strategy business. imperative And that improve to some But intrinsic with strategic our supplement will some going overarching well acquisitions in tuck-ins way

parts all company. in the value creating So of

is to take that to going all of we a goes can where significant So some is capital company, with accelerate of be amount buyback. research much the in And innovation. modestly reinvest importance continue and of and this the inside money, innovation, money done the meaning development allocation, how of to share

So as this structure at are is a different a looking a [indiscernible] that. when we different and company debt post both

accelerate ASCs. our as innovation, accelerate a that Those sites areas. We're and growth, are not penetration a should drivers multiplier commercial to our intrinsic drive like strategy request of value organic alternate our about in think on of for So care, the a company.

Clare Trachtman

specific what therapy. this. is Kidney that how more will increase Kidney patients Really to as going do and and PD Care, help Care. follow this kind of penetration focus globally. Toth enhance to Chris obviously, they within both on would just to I focusing continuing Danielle, elaborate capabilities say on there and really digitally And But well to they're to and on digital on out advance are clinicians What

more business, In broaden therapies continued well. upon they'll therapies build multi-organ to think continue into I addition, the renal replacement within as acute support and therapy the

there build upon a they entity. think strategy they'll to continue I and execute So have stand-alone that that a as

Joel Grade

that Yes. to said strategic their reinforcement growth is Clare of that start see And accelerate level really about and reinforce to And both a of areas frankly, allows and I we're debt to this allocation going have the growth. I has those Joe what think the one at us their inorganic that just we've just for as on is then actually and that what said, opportunities targeted capital rationale Kidney, organic that ahead idea Joe separation focus both talked us.

Operator

for gentlemen, this and call conference concludes today's you participating. Baxter with Thank Ladies International.

Baxter International (BAX) 8 Feb 242023 Q4 Earnings call transcript