BDX - Earnings call transcript Q3 2024 | Becton, Dickinson and Company

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Operator

Hello, and welcome to BD's Third Quarter Fiscal 2024 Earnings Conference Call. At the request of BD, today's call is being recorded and will be available for replay on BD's Investor Relations website at investors.bd.com or by phone at (800) 839-2385 for domestic calls and area code +1 (402) 220-7203 for international calls. [Operator Instructions] I will now turn the call over to Greg Rodetis, Senior Vice President, Treasurer and Head of Investor Relations. Please go ahead.

Greg Rodetis

Good morning, and welcome to BD's earnings call. Vice and Senior Relations. of Rodetis, Greg President, Head Treasurer Investor I'm you joining Thank us. for being is bd.com. call available This made at via audio webcast this results fiscal Earlier releases third BD of quarter for XXXX. the morning, can President The press at today's Officer. and and Executive Chief are call Chris accessed Chief the Polen, Chairman, and IR Financial investors.bd.com. Leading BD's be Tom Officer release website on DelOrefice, presentation and President; Executive Vice

Chris President will segment Following the be for this Tom morning's Rick our Garrison, prepared Q&A the and presidents: segment; and Mike of Interventional of remarks, Medical by President joined Byrd, segment.

get want started, Before you we making I that be we will remind statements. forward-looking to

otherwise and percentage the You year-over-year relevant in can filings Investor available otherwise unless are our between earnings the Unless FX-neutral will in the the period. our all versus on be of release fiscal appendices specified, are and the included basis comparisons on an non-GAAP a basis changes SEC release disclaimer GAAP the on presentation. disclosures website. measures in read and noted. Reconciliations Revenue earnings Relations

developments the recent accruals prior which relates the years quarter, recorded year. to medical fiscal primarily payback resulting current we essentially to Italian from legislation, to during device the Specifically, government relating

accruals. With adjusted the presenting Tom. revenues, turn We are it to am impact that, of excluding very these I over to pleased

Thomas Polen

and good Greg, Thanks, morning, everyone.

We continue to make strategy. our BD excellent progress advancing XXXX

our strength gains X.X%. new of share of and portfolio. innovations, organic portfolio volume the broad-based was Growth of durability and revenue the mid-single-digit This growth quarter reflects demonstrates across and delivering strong

factors BDB and very market in [ and PS in through macro transitory China. executed team well Our ] dynamics

well market markets the to extremely grow We and these believe above recover. we as continue positioned are

to expansion is raise that sequential our operating to again. system and deliver guidance margin over year-over-year our This adjusted operating gross drove allowing momentum BD adjusted contributed share us growing per growth earnings enabled from have once increases. margin significant XX% earnings We strong and Excellence us to

and year-to-date XXX% plan. flow, also free ahead drove conversion over excellent XX% flow team's growth flow over cash reaching earnings cash of in Our execution cash margins, all free with year-to-date,

X members family. advances to and Critical innovation As towards continue and our tuck-in Things progress like successful to of strategy. use team, deliver capabilities our gotten significantly clinicians close acquisition. each with of simplifying consists well a reminder, systems M&A, on only more the our to and and Care efficient digital driving BD provide welcome we strategy Critical care our as organization to more through Care care. to these connected and the strategy higher more Excellence, and BD deliver and on the to I'd a of to growth this growth updates we've empowering with pillars: pillar excited to become quality know our their them through morning. Starting help tools AI

Additionally, it business high-growth immediately to that earnings. adds accretive a is margins and

a doing our has feedback very commitments. our very is teams our I'm customer and fleet been loyal of and positive, and our of Customer Turning connected Alaris with most our of of in with, scale the for upgrading quarter. a drivers. setting strategy long-term significant QX growth begin ahead are the to unprecedented, we work another all-time of to the position deliver number proud shipped strong momentum, base medication record pumps several new management gained The has in To quarter. our support market

above run our for of quarterly $XXX a about historical are built and back to puts 'XX. be a us our have backlog, committed contract at run We rate in position rate million now FY historical healthy which

the business our the to a AI, strategy, billion-plus leadership Through and connected combine billion the as BD over health has this is we'll core pharmacy, management example of automation smart process increase BD care. creates BD medication infusion forefront we opportunities combining nursing Our AI, and space $X our informatics to complete includes Today, how monitoring portfolio, robotics Alaris, BD This and care. the run the microbiology improve and new critical such to automation processes at management lab. medication patient care Critical care AI-driven which of the with health advancing to just one $X improve in simplify Care. is systems that in is and workflow expands and technologies in the automating acquisition of as

as connected, process billion automation automated Looking $X the ahead business XXXX, care to the we become to build we intelligent solutions core view to more underlying and AI to processes transform potential having and care exceeding health informatics as a continue delivery.

platforms. Turning of range launched PureWick the expected consecutive PureWick recently types, and acute support of catheter, this momentum. platform. to continued next-generation delivers home external wider in a female In care growth was QX our our Flex improved is XXth PureWick double-digit body quarter key performance Flex, other in settings. for both to

about the couldn't excited on will impact from response more and users, providers. we Flex PureWick Given have first be the their this patients the incredible

which which a momentum. We're to broader about additional landmark cycle our by I PureWick innovation the launch immune recently laser and released health in the impact $X also it new discoveries a SpectralFX as see range oncology, off long-term in fields. the FACSDiscover SX this advancing technologies, think same As X the of growth Sorter driver. XXXX, and in its as continuing FY enabling Cell overall, continuing new-to-world in franchise X 'XX, become contain billion BD configurations, BD having positions super a of BD we we CellView BD within potential double-digit well Biosciences, Coming growth

and our continue the experiment, provide FY FACSDiscover the was a world's returns combination to health technologies. The BD [ will in published sample oncology position were portfolio high-throughput We as to same cytometry capitalize innovative technologies. The This the and BD which our this new used reagents ] of space. to and year believe in cadence color this of space research customers the opportunities Analyzer, of RealBlue immune AX market we analysis Cytometry. first and in Journal remains leading expect testament as BD technology launch FACSDiscover the which with 'XX on for focus flow well growth, and future RealYellow a groundbreaking serves a with us our XX to innovation these primary

QX, drug continued Finally, Pharmaceutical a business, med BD and that revenue opportunity, within GLP-Xs. Since a double Biologics in implementing to to be XX% to capitalize no grow Systems total than other drug we've to the leadership, positioned we our been see now as And Pharmaceutical delivery prioritize it including manufacturing our BD for digits. start and our biologics is Systems XXXX, significant growth this innovation excellence better expand on our preferred represent over of of partner scale enhance strategy delivery. believe biologic in tech trend. company quality the we

of XX prefilled the BD biologics Since the a new syringe. chosen majority the be for has prefilled that XX have BD continue syringe partner drug to XXXX, and launched in use been First, out use device ]. [ biologic the of a that approvals

potential have clinical by syringe of platforms. we innovation this have contracts Second, auto-injector with biosimilar a therapies across product GLP-X view the [ trials serve over now our agreements announced device multiple molecules, XX as potentials as through category, we XXXX. Today, multiple drug BD's and we leaders, of significant and and advancing signed GLP-X pen the in beyond novel market novel ], strength GLP-Xs, GLP-X we delivery billion consider clinical previously category $X capacity our expansion,

biosimilars that injectors We disorders unique product will that solutions immunological volumes testing to and XX generation We've customers types potential are with the and extremely Alzheimer's, months. Outside provided available working for next-generation see therapies. certain delivery of that and higher of compared wearable GLP-Xs the actively Evolve developed supporting to these pipeline like care injection to the over of market. At we market significantly and involve multiple the therapies self have conditions greater their same the presently to on-body our are for patient enable molecules these clinical to cancer. and Many molecules our revolutionize wearable the for their proteins to the have BD and Libertas trends support of actively need to viscosity entering support complex in early wearable We're BD that develop point are the time, GLP-Xs, customers next are the treatment injectors. supporting trials. biologics needs

drug trend and future this While we to in with very expect line this we develop getting that lines, time believe for feedback longer-term development opportunity a are on is positioned well platforms. positive are we our

and Excellence. Moving simplification to BD our strategy

chain, let in First, our and our is both delivering those plants thank working product our production double-digit customers to improve and for in I express like to quality of everyone and over reduction completion organization warehouses this waste manufacturing in the accelerating me this through yield. year while Excellence reliability year. improvements my our who XXX events BD supply Kaizen global especially gratitude through to

accelerating outcomes are of progression strong flow. margin and in We delivering the cash seeing Excellence BD

remain over Our plans as we're smart to XX% factories. we are on in architecture, by consolidating our reduce investing plant track. our manufacturing network And

smart the XX opportunity top accelerate in the as we smart 'XX for BD success to excited productivity accelerating and 'XX further us analytics. such FY ahead Excellence, leveraging sites Excellence BD already finish Our strategy. The of simplification as positions and and momentum digital beyond. we We're about and factory automation our look performance, combination our are FY to including as predictive manufacturing capabilities programs, through

of cash FY our baseline, FY by through power waste organization reduced mid-single-digit over and we 'XX Sustainability goal power 'XX to XX% frame. In summary, Scope and usage 'XX, doubled and sites greenhouse our by and recently flow margin XX%. We the Lastly, significant Notably, growth number strong XX% we our we Corporate X expansion revenue using above-market and solar empower gas surpassing delivered Report. and we generation. FY our our electric time in versus continue emissions, reduced same organic of responsibility the water issued X green and XX% corporate

financial we are our in raising fiscal again quarter, for positioned diluted performance we well once On believe are the for strong XXXX year. strength guidance the continued and EPS next adjusted

We to many turn positioning and reshaping outlook. in the have financials and leadership care, well Chris review over to now FY trends 'XX beyond. I'll significant most our in of us health positions it

Christopher DelOrefice

Thanks, Tom, everyone. morning, and good

results noted, amid portfolio, performance dynamics previously reflect the strong market multiple our Tom parts macro the noted and even across As quarter's factors. of transitory

revenue into BD Excellence geographies, our Broad performance market includes volume strong specimen grew driven by biosciences of lower BD QX programs, gains margin, with segment's management, our dynamics largest was earnings provide customer growth products across was offset volume China both which to high infusion market market drugs, market double-digit sets, to with was Alaris portfolio by with in adjusted share and by growth reflects our in customer partially an Life driven provide growth goals. I'll performance and XX% in exceeded X.X% upgrades growth MMS in growth. Pharm led revenue also in strong by primarily in now increasing for of by execution gains. had over and growth industry, BD expected MDS market flow dynamics with partially single-digit X% resulted Importantly, offset offset quarter transitory and return patient our dispensing. for organic, exceptional X revenue, consumable the comparison insight segment's and Regionally, growth destocking. Systems to that the systems, developed grew demand across Sciences we This decrease experience. biologic year IDS inventory was cash The This in another Medical performance. instruments. including organic. some offset further devices was our share by prefilled which transitory infusion of the to tough utilization prior enhanced dynamics. plus by GLP-Xs. demand higher-value growth utilization performance in BD led a contributed by partially markets higher our from continued a of increased

double-digit high reconstruction, across in the PureWick was Given in in in prevention our and organic platforms we infection Interventional growth UCC quarter growth growth quarter. Strong instruments and outperformed with by our in leading single-digit another category across of advanced franchise, reagents, double-digit the delivered BD strong delivering significantly continued momentum biosurgery. portfolio all led and Surgery with growth. organic quarter repair major another X

in intervention our which dynamics driven in technology, Phasix by growth as continue with was disease with excellent We offset contributor decrease double-digit durable partially conversion see vascular future growth. to BDI peripheral a that to market a peripheral was China. to performance bioresorbable by primarily by in also make progress oncology, we supported

our margin productivity BD to improvement realized points year-over-year Excellence increased of both year-over-year from moving We improvement and operating our XX.X%, P&L. margin inflation. increase strong basis sequential primarily by and adjusted moderating of cost and adjusted our above gross margin was The Now of with initiatives, driven gross expectations. margin XXX XX.X% and

a healthy margin expenses in gross year-over-year. year-over-year, increasing and by by operating leverage Our points increase basis the slightly margin increased on operating XXX expense basis with driven dollar

As diluted our exceeded a resulting reported or double adjusted $X.XX, grew a result expectations, in we diluted digits on and of EPS these EPS operating QX items, which basis. of income adjusted XX.X%

with Regarding cash on our really I'm cash our flow. and strategic choices pleased the capital execution allocation, and

a deliver to to working and improved BD phasing free cash capital, free in achieve $X.X optimization, on year-to-date focused to X.Xx, conversion $X.X As the to in June. remain certain billion step cash cash cash the free on ability February of long-term year-over-year cash from flow and refinancing improvement XX%, result, and debt track $X.X flow with inventory billion benefit and financing our conversion billion, expenditures capital continued we flow planned goals. Net reflecting investments year-to-date we gains. We positioned remain short-term and cash increased and in $X.X are double-digit inclusive improvement items, proceeds flow 'XX, leverage about Critical including billion continued leverage from as well Excellence our another totaled the productivity Care fiscal above in acquisition our to year

presentation. detailed guidance our for found be fiscal guidance our our year assumptions to 'XX. can underlying The Moving in updated

areas including As we gains close look Alaris. We driving 'XX. remain a on ahead, to we of year across are multiple in confident portfolio, focused our share and momentum strong fiscal

which full year, for are reflect us experiencing. it this For the market latest is also with dynamics, the prudent to momentum, broad-based even others

basis. over our margin EPS growth to guidance to for XX X% and the X.XX% an margins reported $X.XX positioned result, of achieve full to basis absorb our to year. a operating believe we increase the Based the we revenue organic points are be growth margin guidance at range which improvement our expect on the updated raising we full at well of operating $XX.XX revenue were to XX%. adjusted reflects the a year adjusted of organic performance, $X.XX the of now revised range. We able strength on This over to are diluted As bottom implies and midpoint adjusted of guidance $XX.XX

margin in improvement QX, BD on strong by We expected Excellence efforts and continuous leverage our including and continue to our expect revenue driven acceleration Alaris. expense performance, continued

Looking to 'XX. year ahead fiscal

following planning process, early too I in provide are guidance it's can While offer to the as we our thoughts.

gross continue environment we select adjusted strong to ability exist, delivering an We the 'XX, dynamics particularly EPS are continuing point fiscal starting impact growth, confident from accelerating benefit markets. XX% monitor goal in including are Excellence We deliver Critical a good in the be to our performance, in Even to where X. dynamics EPS Care for our Pillar BD and and these given to XX% increasing think expected exceed would operating of margin momentum. margin year growth double-digit

confident of we So growth. in year are durability our Alaris, delivering momentum based summary, on another strong of in the and in portfolio

a year QX, improvement we 'XX on as again expectations. supported year result, deliver overdelivering and free margin of growth our we Our flow And full cash to goals, exceed are our once track outlook. our as earnings year increase fiscal another margin execution team's double-digit on enter

Our and Operator, please to strategy objectives. With XXXX the queue? demonstrating positioned let's to well assemble is Q&A remain on start our we you session. value deliver positive continue our creation momentum can that, BD

Operator

with Marcus JPMorgan. come [Operator Robbie Instructions] from question first will Our

Robert Marcus

for X Great, me.

just a in performance. and growth particularly growth that First, margins, guidance still quarter. in lower some on through about looks I margin where happened by What's walk the us it Maybe the you organic implied fourth things organic guidance, quarter my X.X% margin wanted fiscal both healthy that and confidence to revenue of revenue fourth there ask quarter. operating math, like, quarter, and the perspective a the well the did in from touch to third led in and

Thomas Polen

question. the and off This it thanks to I'll for Tom. over Chris. then start Robbie, is turn

almost many markets And every gains research market, even as look in volume think market the destocking are company, we're saw saw off, compared areas Pharm the [ where we and a I the really at areas. as dynamics, at of specifically strong ] undergoing market look a in We performance we in strong across performance. environment that strong with share QX, BDB of number we pleased area particularly to systems. transitory of first

in at our I our position spaces. we As look performance, competitive those like really

seeing You're been us outperform announced by what's ] date. [ others to

differentiated And there molecules so our that biosimilar that our like Obviously, differentiated ultimately rebound, share our in some us new term. position gains and those really We innovations the in new spaces. biologics of share getting markets getting and and heard the we're long in of And there. BDB. as you talk we're terms about growth even of there position the

I it play to So QX. straightforward. those we as guidance think how talk the we little dynamics just is as more we as about a think to -- continued in that's spaces just in in think Pretty China about about out well QX, really what bit those turn Chris, saw. I'll

Christopher DelOrefice

for Yes. is the Tom. Thanks, question. Yes, pretty QX Robbie, straightforward. Thanks, actually

this much our X on we're because Alaris. point to [ committed sight continued implies with it it dynamic. of range, of is of year to have quarter on the shared, a line maybe revenue line as one based your strongest This the in It's we consistent now key obviously you So that. attributed really to that position. upper the we organic contract line a quarters of relates It's the By ] stronger X% sight way, momentum have little north what top of that. that

necessity, medical launch. as in and that, we for preparing last a Alaris shipping had we're comp because approval, well in recall, year the we you if as addition have under In favorable to stopped QX, we got

saw with positive comp in continued portfolio, you of rest have and momentum the we was actually you the which performance. as actually very you quarter. The similar assume a Alaris, So favorable have

that. spaces standpoint. not a outperform we're making those things relative going So continue significant of assumptions from or recovery market to We're of in to

So story I led there flowing through is right? and We're about opportunity already had It is to the see, strong. cap The outperformed have straightforward. good EPS. outperformance cost roll an to to QX, it in feel revenue. our was our QX hopefully, there. which We Gross just repeat Margin, period margin. really everyone margin, basically on base,

We're terms flow with a not X% actually from slightly there's where high gross margin you expenses up operating standpoint of margin, change end substantive in through. increasing that, call it, gross So growth. the margin. On an OpEx will

natural little will through, and You get a about we bit of a that. that there leverage really flow feel good

I and more we this, think importantly, 'XX think about well talk of as can pretends margins. we for

Robert Marcus

my that's question Well, segue 'XX. follow-up on a to fiscal perfect

You XX%, the heard. factor I growth, Critical -- a And about. color you that I we heard reported, just with which lot XX% up operating EPS feel XX% some could Care want about the where is the that I the margin in make think of of parts, I of the gave China Alaris. add, think to When I timing when accretion versus components, moving that's closes, came Care Street sure you good when Critical is, Maybe about accretion. there's

Just give you anything could down up P&L. and else the us

Christopher DelOrefice

Yes. It's we're Robbie. setting to strong performance. up Look, nicely 'XX. Thanks, Yes. deliver about excited

just pleased. top reiterate, we're First, I'll line, extremely

Pharm portfolio. quarter to despite these as Systems, off is paying in this in volume strong focus notably China. of and market Our strength to strategy and deliver share noted, the gains. Continue ability Tom really And dynamics, BDB, driving seeing most is performance you're what terms on of

margin portfolio we're we now momentum the have from of a XX%. up year, dependent nicely. And I then we expect So this shared on our us one thing. The not on that exceed durability to standpoint, sets

margin. through. significant and kind a come see directionally majority you'll the think of look if what of forward gross year, you importantly, that of back in of sort at think actually, carrying are to different 'XX number think in And QX that the the from going of can we 'XX of where will half I is nice you as

about feel good I margin. to very of So line sight

Care. Critical just earnings As catalyst excited positive growth. about to double-digit It you us continue noted, to deliver gives we're another

Pillar from are X. contemplating headwinds We

but we will that headwind as to we do more part anticipate It's premature of a still that. come on that's share So to that. specifics, absorb

is so Street up a we be the what nicely, that and range where And would us the I low end collectively in all externally that XX%, your on sets reported it is, more of would see I to basis. the and think point, see that

there's this that. into headwind contemplated FX a but the point, So modest year, we've at

The just that transactional did other We now talked about doing flow FX. to with lever had derisk thing, we hedges performance. are we But this, help cash that just formally. another activate us partially gives active solidify actually but

Operator

question of will Bank from Steed come next America. Our with Travis

Travis Steed

I guess change. here. first guide wanted to X questions I the on focus

and things And But course so on track lowered sounded were I the quarter. reasons why the biosciences you all this revenue pharma were China big of the over quarter. guide think kind like of the it

kind And So to just what happened. like curious what thought markets I you didn't of surprised you, changed, get when better. it assume those

forward? So if you just going kind -- there's your get curious when changing kind those of things I assumptions are was on better of

Thomas Polen

is question. this about really Thanks mentioned feel performance the we the Travis, before, across as different Yes, for businesses. Tom. so good the we

Of course, in those you're in dynamics what growth particularly competitively. spaces. essentially is that mid-single-digit that's we at position, given flat even see versus strong differentiated seeing And BDB, those a

markets market to compete that to in recognizing QX, been just turn is some spaces. doing we're continue dynamics we're what going perform think that assume transitory those going those year. above that and in we're calling see all we're we've We in are continue those not spaces, I to which to doing going to

here. has that's in China. a The QX. out played QX And we look at China as so what dynamic same say we've and I'd bit into in built

China. no the certainly noted the dynamic I'd in in bioscience are the of playing year. real things that. in MDS, we at X the China, say projected out So change BDB beginning as is

reported in macro just You're down economic research peer given spending essentially across the where is seeing that every environment. China,

We we happen see we let that until And inventory one also QX there's saw that uncertainty, that on their so is understand we're when back projecting certain they they then see they'll that, things and anticorruption come pull continue on their markets, bit continue. And dynamics that nevertheless, as to out the right? distributors, we are of there don't the So dynamic it, won't year. We it, better inventory in QX. in do there. But We to we QX the through that would performance QX. a That's onetime expect China down. levels some in repeat saw in play really expect bioscience that Travis. side, think particularly

Travis Steed

And of to reported of Okay. then question year, guess revenue into kind need follow-up growth. double-digit the more what is do I you growth next kind get to kind that of EPS

ex were of BD that you at Just headwinds kind X.X% kind these talking if doing into this of some like year possible year, wanted the Alaris, math still is this to close looking to how seeing of revenue next plus, Before X%. growth. kind to at just about see think year? I about that year, of is X.X% you're linger the next to the growth looks

Thomas Polen

share I can just to But in what recovery going Travis. seeing particularly this guidance is revenue we Systems this even color. to Obviously, do on which maybe Pharm timing. the is expect, not call, We're easier on probably some us predict environment, do give you're

given forever, that's clear. Just you it's destock -- So right? pretty can't

the of research science dynamics. Some spending life

players think into lot you projecting of spaces in into -- a those early are about 'XX. recoveries pure If later

continue transitory quarter deliver exact those 'XX. that that the year, as across space. But environment. able little we will you us a before next of that I dynamics, improve good. despite into expect, those come those think we give quarter as And only see that to think to mid-single-digit course, guidance go spaces, we growth this we'll all to observe be see to we would on while bit feel I give to up FY particularly hold more And market we facing we're this

Christopher DelOrefice

Travis, remarks, just in performance. one these that delivering strong in where still other dynamics -- say X this growth. environment This my quarter. prepared an confident is continue, we quality things. even we're One, maybe did just did I in

more alone point, Alaris got just think used as That's long-term these businesses recover, a well And there. biologics growth those good X well market that single-digit market grower. be continue put your and Tom's those worth outperforming $X so are and those Pharm Alaris we strong seeing durable dynamics, to that still we perform benefit, trends areas trends, than Systems performance. in I You've about we're we're consistent transitory billion, context absorbing. those right? to nearly And are that. headwind markets, just are We're significant feel comment, double-digit to high definitely to

I'd strong add just performing, consensus really there -- throughout portfolio. of rest So [ look management that performing means was across to portfolio, what our strong, BDI specimen well, board ], -- MDS the at growth the our is is

Thomas Polen

seeing Yes. MMS Maybe of we of momentum. see kind We're don't consumable strong slowdown kind just high-volume our the volume a is, and MDS, is that at side as and really of to we PAS, the gain color portfolio look a couple like products. other of business, growth bits core of durable share in areas

we're as connected care So think AI our back in progress. we automation Alaris portfolio, that. Certainly, medication and now good informatics, strategy about feel with really making on we health our good in management

$XXX You plus we we X to rate million year. had we're the quarter run Alaris that hold. at back into to per us we're already say -- months going prior expected had ship back X QX, That's faster heard going than on the

we at and feel X we've We're orders from as Alaris. we really into with we momentum, that $XXX about forward, built going for continue basically year. started run nice the here million-plus backlog expect of that. backlog Remember, on to So out. And a went that rate good we

We excited year health care backlog portfolio as of care well. areas connected at again, connected that expect to at, year next least for automation that medication this level. Other about at that -- normalized a or exit we hold had pre-ship we're the really

are well Products not strategy course, talk well, care launch our management new customers. chronic which female about -- with double-digit which strategy laboratory heard got that's about. And like continues have PureWick really in targeting really automation Systems, to launch happening the us new then that next resonate we've and year, also our very Of excited PureWick disease the space, we mobile growth. there pharmacy settings, automation as only but Pharm biologics that we're in happening, PureWick you

there. Biosciences, We on anti-coag starts boat. the expect our continue very that And and side Biologics into underlying 'XX. don't then vaccine the expect to But as any certainly in to that whole we right, strongly that destocking will change lift I now alleviate, been us give say momentum we're the The certainly at more bit one, on that where can I we've maybe a color point is market -- we're flat. little too, seen has be that just would down.

think peer at -- look single down We've flat. been of is in that you is an a I every space. almost being peers, If outlier bit

quarter-on-quarter We at if sequentially -- seeing them we're are a bit quarter-on-quarter. we instrument up purchases, seeing look

we think discussed across around China future, the China about widely in stimulus the As industry. is been that's discussion there

the as initially for coming for and needs it's more I down on those the assumptions maybe are think in that a clarity instruments. in think [ expected. sometime we're more turned positivity we're in then of approved folks 'XX, starting people that the were areas. grants November would not seeing seeing But certainly, of from perspective, from bioscience expect probably what bit timing again, Other that signs there'll some in some the specifics submissions, I U.S. there those China, clarity, on and we an perspective, more some get I seeing, on it's into we're green we in more even NIH timing still that the bit getting certainly to our a POs and a ] be of now call. grants and stimulus see too. But get worse, second shoots guidance,

Operator

Goldman come Sachs. will from question next Our with Roman David

David Roman

year this starting that high-level revenue ask side, than drive bolus of to that around Alaris. into contribution maybe of on in year. on the of the we the the should capital I some next allocation. the growth But then wanted to have sort you business you beyond perspective how the about revenue performance question But from drivers on expect perspective Alaris one and that appreciate think one

Pyxis have launching. you a I think platform next-generation

for see that the boost X sort You contextualize Maybe the that automation next starting to should up of Alaris the have products pharmacy steam. business beyond some growth of the just quarters? in pick we

Thomas Polen

start I'll here I'll Garrison the MMS, categories. and X overall with This in -- Really off, really I'd just with sets, Mike into that. the we turn volumes Alaris. we've it strong thanks We got the Yes. along is see kind is space, growth David, room. Tom, break driving then let's consumables who growth IV the in it in that us start or fit cetera, in to X One with procedure et strong of for off of have consumables question.

took not to the its as well share run as look independent data So Alaris as quarter our in believe but rate, we back we as market you only we at mentioned, is historical own. and

in overall are those both solutions. We to it and that. other feel in site of we we about other we're to and automation, health back which suited trends then, good about leader we So for next-gen ideally year, connected Mike really our which the address that long around interoperability, care can position are by course, of market labor And U.S. there. through improvements, next the productivity those of launching excited comment big and customer there term, pulling elements comes pharmacy have spaces do needs. pharmacy in the and inclusive the Europe starts of have half course, on when costs far the and demands portfolio, then, of the of and Pyxis shortages, And each

more Mike, details on maybe, what we're So seeing there. some

Michael Garrison

Sure.

portfolio What we've next-gen that management across will So in the we've addition cadence launch to come med additional for the of is got Pyxis XX about out. a releases innovation. year, next implemented connected

the very to nicely, that in is it's portfolio. some the core growing which additions pharmacy, whether of acquisition MedKeeper, So

settings. the entire we're Our still, long-term along stay But nonacute a go and some that, market, acute perspective. and data perspective, connected starting are to less ways which their from going that hospital expand environments These into MedBank with needing environments. or shift understanding into the inventory is settings to hospital-based from total care care of acquisition, of an less

market there. Growth innovation in that cyclical. think from really I So is we're an positioned well

very and goes model And also, of have a financing there. it around terms would set So business of do we happen. offer capital operating very sort capital of as leases. strong the But a book we flexible with service

Pharmacy less of area. we before our sequentially -- also robotics Europe the year. A the that automation little that So commented show of incentives is of the cyclical Europe. company some to bit volatility bit tax order the very, in this have customer a the sort been automation of acquisition, caused we've bit been nature maybe see a we very interest we're slowdown in largest significant in in Parata competitors watching, in bit -- started and pick up that last think little we've built that than little the a Europe that here more ] -- we've both there's double-digit a RapidRx in on ROA pharmacy And and a fairly year, It's I between and [ world. strong. growth but change book in quarter-to-quarter, U.S. high very in

about provide long-term efficiency, sector, very, around The robotics reinvent both the to around pharmacy. additional and start are strong good fundamentals that. labor feel health of safety, sector the retail use care, we there their hospitals in care very artificial to the in So around and in as intelligence efficiencies

management year clearance So I and and very announced couldn't going connected be the to very this with -- are than areas continue back strong Alaris call is there the that what better and that fundamentals the are strategy than [ areas, got last ] anniversary But both customers. resonate expectations where now. think it's X-year on any the strong, underscore that obviously augment coming in we across we net while is just had it's going right that

Thomas Polen

the for question, David. Thanks

David Roman

a I ask Sorry, here. assume can I follow-up --

Thomas Polen

David. ahead, Go

David Roman

macro year, you is of maybe P&L that be just here together describing you here your for Can the you're a as put comments of growth helpful -- lot next the what would on about that. performance expenses. operating what your given be factors flattish looks and from you high BD like flow do given dynamics, especially share. differentially what position of which But can to sort perspective, market end to a logically to think rate, one about market to Sorry things through you are

the underlying of the next are that for the year? spending kind of So sort of we that how should put XX% what of ] discretionary P&L expense And floor assumptions earnings rest below out there around you've about that type gross sort [ margin? are think in

Christopher DelOrefice

and It's think David. an be, indicator I I shared. kind exciting is would the Chris. of 'XX -- think of full Yes, what' Thanks, Yes. of QX year the comments as pivot on 'XX, based

in So we talked now 'XX. margin exceeding about operating FY XX%

that points it significant of coming north So majority margin. from of The implies XXX of basis gross is improvement.

to digital investment business of all is an for your creates through, part go-to-market, to The benefit flow as and of R&D commercial the starting more more drive in Excellence us margin. to kind point, intent investment in BD to, cetera. seeing building you're that below capabilities, opportunity et which, growth, reshape So of gross is point, XX%

principle sort our and of we've well. advancing will get model natural to always be as Our from G&A that of space, leverage business also there talked global services a we're kind about

will it that So 'XX. catalyst a will is in minor be also catalyst. go-forward a be The leverage there, but

core itself to on your To point, growth lends leverage nicely of gross sales So natural of of think support to the that we base. that's and then margin. your reinvestment more out value infrastructure the flow-through how and kind formula,

Thomas Polen

to good momentum us just launched we Yes. one in there. And we're the prepared be to couldn't pleased heard last more remarks. points there. getting this which Chris' add about you David, that thing we year, really talk BD other Excellence, maybe the with

Kaizen up this to we're events XXX heard, you as So over year.

major Shingijutsu improvement is continuous based really XXX-plus organization idea we improved come the pursuit Kaizen through is the line that providing and with reduced excellence of where course, an the of Of and BD in productivity. in work the everyday of part and immersed that events organization the we're that which as series through seeing that a as on then capabilities systems, mentioned tools, to our like we do waste in their specific Kaizen, areas. And of Excellence the

up you're also seeing et able better plants, manufacturing -- plants, over about under -- course, advantage that and plants. initiative are now now, folded which exceptionally the there's just have. having a in as flow then mention no margin. given our smart in well. We operate capitalize one even strategy company which we're And which happens as on out we're given strong from year-to-date with scale to those predictive me ramping we That as consolidating technology, 'XX, we companion around of actually consolidation the bit as flow think You're that's think investing value starts scale flywheels end that 'XX at in a RECODE, basis things taking up of as as fewer seeing of factory larger the of larger XX% fewer we're our of behind up less We with we production BDS that as the you Project our you analytics, And it improvements that be than course, in med heard that robotics, AI, which of see that also continued that that. At of get able our positioned cetera, to tech level. and plants, we but that a productivity company same cash through kicking the performance time, right? of is further really 'XX, got of in with CapEx, excellence the well, we to

digitizing. been we've so And

have We paperless. now are that a areas quite fully few

now digitizing all data of coming against So been predictive has the lines, off our we're allowing analytics putting start to which those. us

As performance seeing mentioned, we've on plants done we're our focus a I that top XX with and where that. from accelerated

we're Kaizen [ hear of in our of Day really forward just QX as not Expect to [indiscernible] the as next ours, but going XXXX. strategy more phase be that to focus and 'XX. key that's is over margin to GP strategy And ] combining Investor going well, to factory at with about to a be so in look theme smart 'XX, that continuing that strategy which excellence drive we post-BD

Operator

from Patrick Stanley. come Morgan with Wood will question next Our

Patrick Wood

because keep the covered this, I'll a appreciate just want little into had guys you market. range a to definitely and given come out of few a quite time in reasonable to have I tough one, companies have China bit it different industries across but you've And I a timing. more the dig

like side, we dig customers? you ], these some Is dynamics transitory are of seen outside changes what there Or the companies [ VBP of biosciences lots underlying the that. So structurally on I I'm my genuinely there's from dynamics? trying question said, obviously, any on of market. in guess into know guess, you to I Awesome hearing are has flagging you changed? just as is ]. the that Have vol you MDS [ stocking? anything feel that

Thomas Polen

Yes. Thanks, the Patrick, question. for

team we China. as of breadth We great So view needs, to with portfolio. we've in continue across and it market opportunity unmet serve our a still large significant market the got a that

in We health invest practices access China. advancing continue in to and care

has -- you we MDS playing expected. ] in see [ as VBP out As been mentioned,

nicely. in Just China note actually volumes MDS our there, up very are as a

categories look complementing growth if we're volume the strong in you So MDS that we're at price -- even where pressure, are we those in the that. seeing VBP, but seeing see categories

over do in that the commented on that ultimately don't in So de-investing long our end across be be will research as funding, the volumes higher in market term, that's research plants long will of as because to think We lower a very the term. you investment. And as China an there are China sight see been that and broadly recovers we in research busy spaces. those The mentioned, board.

are I economic think We they'll distributors coming that anticorruption will There in and I challenges up processes of pause a that more when clarity light. and a take as actions think, and level some dynamic. And ] transitory there's of other the will and then and [ macro related. bit, factors, in economy dynamics, at China, to that's down uncertainty evolve of pull with inventories end that just the into expect combines recover, those those the where some happening are a these they

which, in would expect we to nature. more transitory again, be -- So

that see spaces beyond to do business really We continue market we we still well areas an long-term continuing important transitory it a those China we as do space, the And So of invest us. the are market. attractive of that in to in see. some for have

So maybe high-level as we overview of we see look forward. a and that's what

Operator

Wells come with will question next Biegelsen Fargo. Our Larry from

Larry Biegelsen

million, implies right, a rate that X ask quick the $XXX if On I'm to sales both the them using 'XX million upfront. way is implied $XXX the and I'll fiscal right $XXX about think the ones sales run in me, have 'XX about about weighted. QX math Alaris, to different for And doing X back-end just annual investor is of Alera in very way from been a Chris, of 'XX a it's And last fiscal caused expect there growth margins years, fiscal any $XXX look million? lastly, obviously, anxiety, you sales, about standpoint? or the lot do cadence million

Christopher DelOrefice

but question, factors. the all question. market for dynamics, monitor to on these still second continue stance, we're thanks Larry, need we our the Yes, in and planning to

balanced played one a choice exactly execution about. think That I is on predominant was more is year much had be to the going one throughout. thing sure driver. we rhythm as mean a year, for that was we loaded, this right? takedown talked strategic I The the front-end last out margin inventory all that

fact, from of standpoint years. matter a few X against a the past said executed As past we mean margin years, everything the I we've

that's big that was FX we see that big also a front-end same another So item degree. change. don't

November. balanced I much with be that to we an more think So in I up think naturally, [ item and But we're tough when provide going guide a official our that's should share end we'll don't more phasing ].

Thomas Polen

QX. very the ramp But was, [ was end second we that ] Alaris the year other big just we in had a thing at of that this given the course, half of launched

QX have of So you're well. through ratable performance going year in much QX Alaris to as next more

more smooth So at we're looking look that as forward. much which very much we to being forward expect we back would

going to for at certainly any 'XX. not by we're We're product not give line Alaris, point. on guidance that Just

I that's to the ] we're more necessarily For back my from that the run give rate run as that to at that than think And take 'XX. I do But 'XX? opportunity million Can November sure. and commentary, call. rate. least we'll color on the back on go $XXX wouldn't it we -- through [ historical take better into at, an

Operator

come will with question Wise Stifel. Rick next Our from

Frederick Wise

in operating make thinking just your 'XX fiscal grow hear want or about clearly. want too total maybe just has you're thinking being that language margin 'XX talked the It's not it of if correctly. correctly. I understand a it it this on to been imply but season, I'm the to else and commentary? includes thinking more fiscal as it guide. everything commentary growth one going earnings EPS not we're fast careful about I'm clearly make thinking you is to initial I'm I make correctly. in back doesn't if And XX% that Are about it deep Maybe Just to XX% sure 'XX? imply correctly, -- to over Critical that sort But as Care, sure does into about I in sure it to several basis The remotely -- time. conservative I'm times, for about

Christopher DelOrefice

mean, is I we're substantive look, a to a of to -- Yes. be business. fully 'XX to part think Thanks Rick. the is it, about. there's excited contributor we on Care Critical for base BD not the question, Yes. just is your the point, lot that's be clear, margin generating

So like operating that right? improvement to XX% margin. Look, is, year shifts of think are goal. margin we're the opportunity to we sitting is estimates We end externally. exceed it's from to our X%, importantly, mix now are low our range, the point, we well a under where to as external is year. goal coming great XX% throughout margin there continue the move is from, Again, of that coming significantly And gross I actually do terms reported see just above positioned create exceed the to starting we now where every in

do the context, We the share kind top the dynamics. by strong these been market So just we've able important way, year, of this performance and to line, deliver early. this, despite it was knew on it's to questions, like

monitor we're moving So we'll about continue those, feel positioned XXXX. into to how really good but

Operator

will come with from ISI. Our Evercore last Vijay question Kumar

Vijay Kumar

me. for one Just

Some peers about I ] [ some the talking a your you bottoming issues destocking. pharma close right, of side, mentioned, are have these think of on on

like like your -- destocking, certainly biosciences how sort are look bioscience just looks and China, perspective, maybe like moving destocking out. I should continue. from transitory should it headwind impact you when So playing those pharma seeing this And of issues, at

while? 'XX. Or this companies think half VBP think is cautious tools about most about should ] that headwinds, How last I first have of China? growth? Is [ a for that to that been back [ we ] could of should get

Thomas Polen

Vijay. great it's Yes, question, a

with Systems on then and and So touch let touch then Pharm me China. bioscience maybe start base base the on

Pharm our that year, ultimately remarks that make around on outperforming flat year. are that companies. our environment, biosciences, exciting and category I market are innovations and think, we more as going in not multiplexing with just that of So on allowing analyzer ourselves segment, heard across that. it's in same in but commented only few that driving people on that of really not we as see mentioned, FACSDiscover in and can And technologies Systems that more [ this up to begin recovers, see the that all technologies the continued the in innovation systems are tools widely as been There's market innovations the volumes. this you some new dies, those cadence are sorters, only to straightforward. and next continued are And they in ] us driving like or That's we -- with other market -- buy prepared Again, larger pretty space. benefit picks you launching first share the very us

to it going to it's the So of that. be we 'XX watch 'XX, our through good which, QX, recovery, assuming on update let's you tight about would this the in in year, which guidance. continue we comes really updated that. timing down the balance November some point of we're is then how to mentioned, guidance And And feel we've again, expect at as we'll

continue double-digit peers, benefiting again as within see we'll differentiated position no that we some to Systems, big molecules with also from of in on underlying, us. market. On that timing large whole space. GLP-Xs that that We the which are Obviously, benefit of get our growth think have see slowdown demand the is current biologics there. market Pharm component look, biologics on a we and I to clarity strong versus that is

with GLP-Xs already over We a longer also play the our pipeline are agreements towards are see months device biosimilar a start early of in. the molecules launch really that of we position that play shared will -- next for GLP-Xs, new position out. have out having XX And as we also there. the XX seeing we as those moving launch through then that got spec-ed signed we've number the GLP-Xs But over and term we our there, as early like

the mentioned, been everyone the think that, segment focused for Of forever. seeing across and and continue that that can't anticoagulant is that's broadly really the course, destocking us. vaccine on as has And you happening for sector, I others,

EPS coming, that a we start we our as out in China have of So -- we've don't double-digit monitoring market XX% year, China, the look go plan more high specifics -- would growth around have as think again, the shared continue we've next expect taken have -- at timing stance our EPS as for the FY that expect would on watch next don't to And but normalized to we we to that. that in position major look, internal to we We've growth China internal growth back about there modeling move that. number. into year guidance. we as we we on half our play of a build conservative be assumption taken growth. On more and as -- numbers conservative we a that returning that, as go on we'll we'll But modeling own back forward, certainly, to for returning and 'XX we go into give we

that starting in recovery year will to will MDS, research that decline. next -- and China year. the don't year given macroeconomic closely We see overall be spending we'll We've change macro market we'll happening that seen the terms scale see be play continue to don't in overall. We still see environment of happened how again, do to continue to we that's -- of that that be we We just timing biopharma a this significant watch for to and watch something China expected. recovers, as expect So the this as MDS. out related VBP the

some next EPS China in MDS preliminary hopefully, what in built as guidance. VBP, number I the give and some for But on we next color that to on year. pressure think change, we've on past, less but gives we we of expect shared just as into more thinking our i.e., China in China from we the we've don't said that to year come that see

Operator

At That you. question-and-answer remarks. the additional Thank like floor closing today's Tom back session. this concludes I'd to turn or any time, over Polen to for

Thomas Polen

you, of today. all Thank our operator, us to call joining thank Okay. on for and our you investors

positioned deliver strong, broad-based above-market, achieve We pleased and guidance. increased are to growth our FY well to 'XX are earnings

and to strength As of operator. support for you, you in by to are across in multiple portfolio, growth our opportunities your excited to we the connecting continued momentum Critical gross Thank in welcoming we look and Care with November, margins driving forward 'XX, BD ahead FY everyone cash again Excellence, flow BD. continued thank team and We BD. look

Operator

webcast. audio Please this wonderful conclude for and you this thank at of BD, lines time, does This today. you. have Thank day. your On behalf disconnect a joining

Becton, Dickinson and (BDX) 1 Aug 242024 Q3 Earnings call transcript