Solventum (SOLV) investor relations material

HIS separation strategy and rationale

• Autonomous coding in revenue cycle management is seen as a major industry revolution, but requires significant investment and focus to realize its potential.

• The HIS business is considered highly attractive but not a strategic fit for a medtech-focused portfolio, prompting the decision to separate.

• Separation is expected to accelerate HIS growth and value, especially if aligned with a partner in the HCIT space.

• Key decision factors for separation include strategic fit, shareholder value, and maintaining strong RemainCo financials.

• The separation path will be chosen based on shareholder value, proceeds, timing, certainty, and transaction complexity.

Growth outlook and drivers post-HIS

• Organic growth target of 4%-5% by 2028 remains intact for RemainCo, with MedSurg and Dental comprising over 80% of the business.

• Growth acceleration is expected from commercial optimization, under-penetrated legacy technologies, and nearly 20 new product launches through Q1 2028.

• Acera acquisition will contribute to organic growth from 2027 onward.

• Growth drivers are concentrated in MedSurg and Dental, with specialized commercial organizations and market development focus.

• Margin expansion is anticipated due to programmatic savings, operational efficiencies, and favorable business mix.

Financial implications of HIS separation

• Operating margin dilution from HIS separation is estimated at around 400 basis points on a full-year basis, net of TSAs and cost reductions.

• No update to the long-range plan (LRP) margin target yet; a new LRP excluding HIS will be provided at the next Investor Day.

• EPS dilution is expected but not yet quantified, as final separation path and timing are still being determined.

• Proceeds from the separation are intended to be returned to shareholders while maintaining a strong balance sheet and investment grade rating.