Baxter International (BAX) Raymond James 46th Annual Institutional Investors Conference summary

Strategic transformation and portfolio evolution

• Completed sale of Kidney Care (Vantive) for $3.4B and BioPharma Solutions for $3.7B, generating over $3.4B and $3.7B in after-tax proceeds, with over $3B deployed toward debt reduction.

• Transitioned from a geographically-led to a vertical business model, now organized into four global segments for increased agility and focus.

• North Cove facility restored to pre-hurricane production levels after Hurricane Helene disruption.

• Exiting the solutions business in China and assessing opportunities to exit select products or markets to streamline operations and optimize the portfolio.

• Board is actively searching for a new CEO to lead the next phase of innovation and agile growth.

Financial outlook and capital allocation

• Targeting 4%-5% annual operational sales growth and 16.5% adjusted operating margin for 2025, with annual expansion expected thereafter.

• Targeting ~80% free cash flow conversion, driven by improved operations and working capital.

• Over $3B in debt paid down, aiming for a net debt to EBITDA ratio of 3x by end of 2025 and investment-grade target.

• Future capital allocation will prioritize debt reduction, business investment, potential share buybacks, and a right-sized dividend.

• Guidance excludes discontinued Kidney Care segment and reflects non-GAAP measures.

Innovation and growth drivers

• Novum infusion pump launch has driven significant share gains, with expectations for continued momentum over the next 18-24 months.

• Targeting ~10 new pharmaceutical product launches per year, with double-digit launches in 2024 and similar expectations for 2025, focusing on higher-margin products.

• HST segment expected to return to growth in 2025 after a decline in 2024, driving overall top-line improvement.

• Emphasizing digital health, AI integration, and customer-inspired innovation in key care settings, with a robust pipeline across all business segments.

• Frontline Care segment stabilizing, with fewer headwinds anticipated in 2025.