37 th Annual J.P. Morgan Healthcare Conference

Transcription

1 37 th Annual J.P. Morgan Healthcare Conference January 9, 2019 Chris Reidy EVP, CFO & Chief Administrative Officer Becton, Dickinson and Company

2 Forward-looking statements These materials include forward-looking statements and it s possible that actual results could differ from our expectations. Factors that could cause such differences appear in our fourth quarter earnings release and in our recent SEC filings. Non-GAAP financial measures These materials also include Non-GAAP financial measures. A reconciliation to the comparable GAAP measures can be found in our fourth quarter earnings release and the related financial schedules. Certain financial information excludes the impact of the foreign currency translation. Reconciliations of certain forward-looking non-gaap financial measures to the most directly comparable GAAP financial measures are omitted from the financial schedules as we are unable to provide such reconciliations without unreasonable efforts. Sufficient information is not available to calculate certain forward-looking adjustments required for such reconciliations, including future restructuring charges and acquisition-related costs. We expect these future charges and costs could have a potentially significant impact on our future GAAP financial results. Basis of Presentation for Revenue Growth Metrics: Comparable FXN revenue growth reflects growth on a currency neutral basis, adjusted to include Bard in all current and prior periods, excludes divestitures, and reflects BD / Bard portfolio alignment. Reconciliations of comparable FXN revenue growth to the comparable GAAP measure are included in our fourth quarter earnings release and the related financial schedules. A copy of our earnings release, including the financial schedules, is posted on the Investors section of the BD.com website. Note: All figures on accompanying slides are rounded. Totals may not add due to rounding. Percentages are based on un-rounded figures. FXN = Estimated foreign exchange-neutral currency growth. $ = Dollars in millions except per share data. 2

3 1 Long Term Strategy 2 FY 2018 Performance Review and FY 2019 Outlook 3 Forward Growth Profile and Cash Flow Generation 3

4 1 Long Term Strategy 2 FY 2018 Performance Review and FY 2019 Outlook 3 Forward Growth Profile and Cash Flow Generation 4

5 BD s strategy has accelerated Improving medication management across the continuum of care Leading in infection prevention and health care safety Our long term strategy is focused on Providing leading medical technologies and innovative solutions for our customers and their patients, Driving sustainable healthcare by increasing access, driving better outcomes, mitigating system cost pressures, and improving health care safety, through: Medical Life Sciences Interventional Enhancing the diagnosis of infectious disease and cancer Empowering research insights inside and outside the cell Advancing the management of high burden diseases Enabling surgical and interventional procedures 5

6 Built upon a strong foundation, and advanced through two transformational acquisitions 2018 & beyond ~$17B annual revenues Investing for growth and innovation through: operational and commercial excellence geographic expansion tuck-in acquisitions Healthcare process efficiency, automation and informatics to be a provider of solutions Clinical outcomes and disease management 65,000 employees worldwide ~$1B annual R&D spend addressable ~$70B market 6

7 Our plan to accelerate growth and impact through a focus on our strategic pillars Category innovation Deliver innovative solutions to shape the future of healthcare Customer outcomes Building strategic partnerships to create measurable economic and clinical value Globalization Expanding geographically to improve healthcare around the world Simplify & align Making it easier to do business with BD Making end-to-end processes more efficient and driving margin expansion 7

8 1 Long Term Strategy 2 FY 2018 Performance Review and FY 2019 Outlook 3 Forward Growth Profile and Cash Flow Generation 8

9 Strong performance in FY 2018 FY 2018 to FY 2020 Bard Announcement April 2017 FY 2018 Actuals Revenue growth (1) 5 % to 6 % 6.5 % (2) Operating margin expansion ~200 basis points per year +210 basis points Earnings growth Mid-Teens 16.1 % 9 (1) Reflects comparable revenue growth on a currency neutral basis, adjusted to include Bard in all periods, excludes divestitures, and reflects BD / Bard portfolio alignment. (2) Underlying excludes impact from the U.S. dispensing accounting change and Q1 hurricane impact in Puerto Rico.

10 FY 2018 Highlights Strong performance and execution to finish FY 2018 Very strong revenue growth across all three segments Driving robust margin expansion and mid-teens earnings growth Successfully executed on two transformative acquisitions Achieved $350M CareFusion cost synergies Bard integration and cost synergy capture on track $1.2B debt pay down this year and at 3.9x gross leverage Strong new product uptake: New product innovation driving growth, including the new Alaris pump, Pyxis ES, BD MAX, BD FACSMelody and BD Horizon Brilliant dyes, LUTONIX AV and Covera stent graft Notable portfolio updates: Successful completion of the U.S. Dispensing change Acquisition of TVA Medical & divestiture of non-core assets 10

11 Balanced growth profile across the portfolio FY 2018 BDX Revenue Growth of 6.5% FXN (1,2,3) Medical Segment 6.4% (2) 9.4% Life Sciences Segment 6.8% 9.6% 9.3% 6.4% 6.8% 5.6% 4.1% 2.9% Interventional Segment 6.1% (2) (3) 3.7% 5.3% MDS MMS DC PS DS PAS BIO PI SRG UCC (3) Developed Markets 13.2 % (2,3) 5.5 % 11.6 % Emerging Markets China Strong growth in developed markets with the best emerging markets performance in years 11 (1) Reflects comparable revenue growth on a currency neutral basis, adjusted to include Bard in all periods, excludes divestitures, and reflects BD / Bard portfolio alignment. (2) Represents underlying revenue growth excluding the headwind from the U.S. dispensing accounting change. (3) Represents underlying revenue growth excluding the headwind from the Q1 hurricane impact in Puerto Rico.

12 Continuous operating margin expansion Profitability initiatives and synergies growing margins ~750 bps operating margin expansion since FY bps +180 bps +210 bps +50 bps +100 bps FY 2014 FY 2015 FY 2016 FY 2017 FY Note: Underlying margin expansion reflects annual basis points of operating margin expansion excluding the impact of foreign exchange and pension costs. (1) FY 2019 underlying operating margin expansion excludes estimated raw material and tariff pressures.

13 Strong momentum going into FY 2019 FY 2018 to FY 2020 Bard Announcement April 2017 FY 2018 Actuals FY 2019 Guidance Revenue growth (1) (2) 5 % to 6 % 6.5 % 5 % to 6 % Operating margin expansion ~200 basis points per year +210 basis points to 150 bps (3) basis points underlying Earnings growth Mid-Teens 16.1 % ~10% 16 % to 17 % underlying (3) 13 (1) Reflects comparable revenue growth on a currency neutral basis, adjusted to include Bard in all periods, excludes divestitures, and reflects BD / Bard portfolio alignment. (2) Underlying FY 2018 revenue growth excludes impact from U.S. dispensing change and the Q1 hurricane impact in Puerto Rico. (3) Underlying FY 2019 EPS growth excludes favorable year-over-year tax rate, FY19 headwinds (resins and other raw materials, flu impact, tariffs), divestiture impact and FX.

14 1 Long Term Strategy 2 FY 2018 Performance Review and FY 2019 Outlook 3 Forward Growth Profile and Cash Flow Generation 14

15 Our strategy drives durable revenue growth over the long term Category innovation Deliver innovative solutions to shape the future of healthcare Customer outcomes Building strategic partnerships to create measurable economic and clinical value Globalization Expanding geographically to improve healthcare around the world Driving durable 5 to 6% revenue growth Simplify & align Making it easier to do business with BD Making end-to-end processes more efficient and driving margin expansion 15

16 Note: 2019 lists reflect planned product launches. Continued category leadership and growth through a robust product pipeline Medical Life Sciences Interventional BD PhaSeal Optima (EU and Canada) BD PureHub IV needless connector disinfectant caps IV Solutions 0.9% sodium chloride and 5% dextrose IV Solutions additional compounds (delay to FY 2019) Next Gen Accucath catheter BD Venflon I with BD Instaflash Needle Technology BD Venflon Pro Safety with BD Instaflash Needle Technology BD HealthSight integrated MMS platform BD Pyxis ES BD Neopak XSi glass pre-fillable syringe BD PhaSeal Optima (US) IV Solutions 0.45% sodium chloride and lactated ringers PowerGlide Cue BD Provena PICC BD Neoflon Pro Global Markets BD Pyxis ES 1.6 BD HealthSight Data Manager 1.1 BD Pyxis SupplyStation RF BD Nano Pro pen needles Type 2 Patch Pump (CY19) BD Hylok glass prefillable syringe platform BD MAX Enteric Viral Panel (CE Mark) BD MAX TB BD MAX Check-Points CPO assay (CE Mark) BD Onclarity HPV (U.S. PMA) BD Synapsys Informatics DS platform BD AbSeq assays for protein expression Additional BD OptiBuild reagents / Sirigen dyes BD MAX Enteric Viral Panel (US) BD Phoenix CPO Detect (US) BD Kiestra IdentifA BD COR (EU) early access launch BD Eclipse Ultrafill blood collection safety needle BD FACSDuet automated sample processor BD FACSLyric 12 color clinical instrument BD Horizon brilliant UV dyes BD FACSymphony S6 sorter BD AbSeq protein expression: 400 additional assays LifeStent 5Fr. ProSeries stent OptiFix open fixation system LUTONIX AV catheter Covera stent graft (AV access graft indication) Magic3 catheter AllPoints port access system Echo 2 position system with Ventralight ST mesh LUTONIX drug coated balloon catheter Long Lesion (200mm+ balloon lengths for SFA treatment) LUTONIX 014 Drug Coated Balloon for Below-the-knee arterial treatment Covera stent graft (fistula indication) Venovo (large diameter venous stent) WavelinQ (Endovascular AV Fistula System) TRIDYNE aortic vascular sealant OptiFix AT (articulating mesh fixation product) SureStep Externals SureStep Intermittent catheters SureStep Male external catheters 16

17 ~$250M Bard revenue synergies through FY 2022 Key strategic initiatives Global reach and impact 1 Expand vascular access with a holistic portfolio of leading catheter technologies within medication management 2 Stronger global surgical offerings for biosurgery, hernia, infection prevention and oncology Developed Markets ~3/4 Emerging Markets ~1/4 3 Drive global scale and geographic expansion by being a strategic partner in US and Europe, and drive enhanced scale in emerging markets 17

18 Capital allocation is focused on investing for growth and deleveraging through FY 2020 Capital Allocation Framework FY Capital Allocation Invest in the business, including R&D and capital expenditures ~$2.8B ~$2.9B Increase annual dividend Well on-track for below 3x gross leverage by December 2020 Evaluate M&A opportunities ~$12.5B operating cash flow ~$6B ~$0.6B Note: Operating cash flow represents adjusted cash flow from operations. Capital expenditures Dividends Cash available Debt pay down 18

19 Increased cash flow flexibility and opportunity beginning in FY 2021 Illustrative FY Capital Allocation FY FY (Illustrative) Capital expenditures Dividends Cash available Debt pay down ~$2.8B ~$2.9B ~$3B ~$3.3B ~$12.5B operating cash flow ~$0.6B ~$17B operating cash flow ~$6B ~$11B 19 Note: Operating cash flow represents adjusted cash flow from operations.

20 Key takeaways BD + Bard performance ahead of the deal model Strong FY 2018 performance and continued momentum in FY 2019 Uniquely positioned as a strategic partner for our customers with unmatched solutions and capabilities in our areas of focus Opportunity to improve the treatment of disease and process of care around the world Well positioned for continued success as we go forward 20

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