Baxter International (BAX) Barclays 28th Annual Global Healthcare Conference summary

Business exposure and operational changes

• Middle East business represents less than 2% of revenue, with only a small commercial presence and no manufacturing operations in the region.

• Exposure to oil price fluctuations is now less than half of what it was in 2022, mainly due to the separation from the kidney business and changes in delivery models.

• Material cost exposure is partially mitigated by MSAs, allowing some costs to be passed through, and there is a lag of up to six months in cost realization.

• Direct delivery is limited, with a mix of distribution and some direct logistics, reflecting the new business model.

Strategic initiatives and operating model

• Recent leadership changes and a new operating model (GPS) are designed to improve efficiency, consistency, and predictability.

• The company has streamlined management layers and reduced infrastructure to become more agile and customer-focused.

• Emphasis on innovation and new product launches is expected to drive future growth and reinvestment.

• The new operating cadence includes rigorous KPI tracking and goal setting, aiming for margin expansion and better forecasting.

Business performance and outlook

• Advanced Surgery and HST businesses continue to show strong performance, with Advanced Surgery maintaining global demand and margin accretion.

• Front Line Care returned to growth, and HST is expected to sustain momentum into 2026.

• Novum pump sales are not expected through 2026 due to regulatory clarity, but Spectrum pumps remain in strong demand.

• Drug compounding in pharma is a strong growth area, while injectables and anesthesia face operational and market challenges, with improvements expected in the second half of 2026.

• IV solutions have reset to a new baseline of demand, with the company maintaining market leadership.