Baxter International (BAX) Jefferies Global Healthcare Conference summary

Strategic evolution and portfolio management

• Completed Hillrom acquisition in December 2021, followed by macro-driven challenges in 2022.

• Initiated strategic shift in January 2023, verticalizing into four operating segments with full P&L accountability.

• Sold BioPharma Solutions business and used proceeds to reduce debt.

• Progressing toward separation of Kidney Care segment, targeting completion in the second half of the year via sale or spin, based on shareholder value maximization.

• Took a $3 billion impairment on Hillrom in 2022 but retained the rest of the business.

Capital allocation and financial priorities

• Primary focus is deleveraging, with proceeds from divestitures aimed at paying down debt, including a maturity in November and a term loan in 2026.

• Targeting a debt-to-EBITDA ratio between 2.75x and 3x.

• Future capital allocation will prioritize investment in innovation and organic growth, with selective tuck-in acquisitions.

• Committed to maintaining the dividend and considering a buyback program to offset dilution.

Business momentum and product innovation

• Strong momentum in MPT and pharma segments, with the Novum pump launch expected to drive incremental growth in late 2024 and into 2025.

• Pharma segment to launch 13 new products in 2024, expected to add over $100 million in sales, with a similar cadence planned for 2025.

• Novum pump, featuring advanced safety and connectivity, positions the company well amid pent-up market demand and upcoming replacement cycles.