2018 Annual Meeting of Stockholders. May 8, 2018

Transcription

1 2018 Annual Meeting of Stockholders May 8, 2018

2 2018 Annual Meeting of Stockholders? Introductions and Meeting Procedures 2018 Annual Meeting Proposals Baxter Overview Voting Results Questions and Answers Adjournment 2

3 2018 Annual Meeting of Stockholders May 8, 2018

4 Baxter s Board of Directors José (Joe) E. Almeida Thomas T. Stallkamp Thomas F. Chen John D. Forsyth James R. Gavin III, M.D., Ph.D. Peter S. Hellman Munib Islam Michael F. Mahoney Stephen N. Oesterle, M.D. Carole J. Shapazian Cathy R. Smith Albert P.L. Stroucken All Directors up for reelection at the 2018 Annual Meeting 4

5 Baxter s Senior Leadership Team Giuseppe Accogli SVP and President, Global Businesses Laura Angelini GM, Renal Care Scott Bohaboy SVP, Treasurer and Head of Global Planning Wil Boren GM, Advanced Surgery Dennis Crowley SVP, Business Development & Licensing Stacey Eisen SVP, Communications Brik Eyre SVP and President, Americas Robert Felicelli President, Pharmaceuticals David Ferguson, Ph.D. GM, Medication Delivery Cristiano Franzi SVP and President, Europe, Middle East, Africa Andrew (Andy) Frye SVP and President, Asia Pacific Caroline Karp SVP and Controller Jacqueline Kunzler, Ph.D. SVP, Chief Quality Officer Scott Luce GM, U.S. Hospital Products Paul Martin SVP and Chief Information Officer Sean Martin SVP and General Counsel Jeanne Mason, Ph.D. SVP, Human Resources Ellen McIntosh SVP, Corporate Secretary Scott Pleau SVP, Operations Sumant Ramachandra, M.D., Ph.D. SVP, Chief Science and Technology Officer Reaz Rasul GM, Acute Therapies David Roman VP, Strategy James (Jay) Saccaro EVP and Chief Financial Officer Cathy Skala VP, Business Transformation Clare Trachtman VP, Investor Relations Jorge Vasseur GM, Nutrition 5

6 Safe Harbor Statement This presentation includes forward-looking statements concerning the company s financial results, business development activities, capital structure, cost savings initiatives, and R&D pipeline including results of clinical trials and planned product launches. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: demand for and market acceptance of risks for new and existing products; product development risks; product quality or patient safety concerns; continuity, availability and pricing of acceptable raw materials and component supply; inability to create additional production capacity in a timely manner or the occurrence of other manufacturing or supply difficulties (including as a result of a natural disaster or otherwise); breaches or failures of the company s information technology systems, including by cyberattack; future actions of regulatory bodies and other governmental authorities, including FDA, the Department of Justice, the New York Attorney General and foreign regulatory agencies; failures with respect to compliance programs; future actions of third parties, including payers; U.S. healthcare reform and other global austerity measures; pricing, reimbursement, taxation and rebate policies of government agencies and private payers; the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; global, trade and tax policies; accurate identification of and execution on business development and R&D opportunities and realization of anticipated benefits (including the recent acquisitions of Claris Injectables and two surgical products from Mallinckrodt plc); the ability to enforce owned or in-licensed patents or the patents of third parties preventing or restricting manufacture, sale or use of affected products or technology; the impact of global economic conditions; fluctuations in foreign exchange and interest rates; any change in law concerning the taxation of income (including current or future tax reform), including income earned outside the United States; actions taken by tax authorities in connection with ongoing tax audits; loss of key employees or inability to identify and recruit new employees; the outcome of pending or future litigation; the adequacy of the company s cash flows from operations to meet its ongoing cash obligations and fund its investment program; and other risks identified in Baxter s most recent filing on Form 10-K and other Securities and Exchange Commission filings, all of which are available on Baxter s website. Baxter does not undertake to update its forward-looking statements. 6

7 2018 Annual Meeting of Stockholders May 8, 2018

8 2018 Annual Meeting Proposals PROPOSAL PROPOSAL PROPOSAL PROPOSAL PROPOSAL Election of Directors Advisory Vote to Approve Named Executive Officer Compensation Ratification of Independent Registered Public Accounting Firm Independent Board Chairman Right to Act by Written Consent 8

9 2018 Annual Meeting of Stockholders May 8, 2018

10 Delivering on our Mission 10

11 Baxter Profile 2017 Revenue By Region Industry-Leading Portfolio By Business Global Presence $10.6B Global Net Sales Americas 54% Renal Care 33% EMEA 26% Medication Delivery 26% Asia Pacific 20% Pharmaceuticals 18% Nutrition 8% Advanced Surgery 7% Acute Therapies 4% Other 4% Continuous Innovation Operational Excellence 11

12 Full-Year 2017 Financial Snapshot Global Reported Revenues +5% Operational Growth 1 $10.2B $10.6B Adjusted Operating Margin 13.8% (Restated) Basis Points 16.3% Adjusted Earnings per Diluted Share $ % $2.48 Free Cash Flow 3 +35% $905M $1.2B See for information regarding non-gaap financial metrics used in this chart, including operational sales, adjusted operating margin, adjusted diluted EPS and free cash flow. 1 FY 2017 operational sales growth excludes the impact of Claris and strategic product exits of approximately 1% each and a negligible impact of foreign currency and Cyclo competition; GAAP sales growth for the period was approximately 4% compared to FY FY 2016 and FY 2017 adjusted operating margin as restated. For FY 2016, adjusted operating margin (as reported) was 13.6%. Adjusted operating margin (as reported) for FY 2017 was 16.0%. See for a reconciliation of FY 2016 and FY 2017 adjusted operating margin to FY 2016 and FY 2017 operating margin (as reported). 2 Operating cash flow less capital expenditures. 12

13 Focused on Achieving Sustained Top Quartile Performance Quality and patient safety Best place to work Industry-leading performance Drive improved performance to deliver optimal results for patients, customers, stockholders and employees 13

14 Quality and Patient Safety Investing in quality systems and processes to help ensure the highest standards Demonstrating strong progress on key quality metrics Positive performance in Medical Device Reports, Field Alert Reports, Conversions Warning letters closed in Irvine, Round Lake Parenteral nutrition patient (left) and family, Lincoln, Nebraska 14

15 Best Place to Work Baxter s inclusive culture and diverse workforce help advance our mission and fuel innovation Recognized by 2018 Women s Choice Award The Voice of Women Baxter manufacturing facility, Cuernavaca, Mexico 15

16 Best Place to Work: Commitment to the Community Baxter is making a difference in our communities by supporting increased access to care, disaster relief, STEM education, and other efforts We drive sustainability throughout our operations Recognized by Hurricane Maria disaster relief, Puerto Rico 16

17 Industry-Leading Performance Portfolio and Innovation Management Operational Excellence Capital Allocation 17

18 Industry-Leading Performance Portfolio and Innovation Management Shifting greater R&D investment to new product development Executed on robust pipeline with more than 50 launches 1 in 2017 Accelerating portfolio and pipeline through collaborations with Mayo Clinic, Ramot at Tel Aviv University/Tel Aviv Sourasky Medical Center 1 Launches include new products, geographic expansions and line extensions 18

19 Industry-Leading Performance Operational Excellence Transforming cost structure, eliminating waste and increasing efficiency Optimizing organizational structure to drive improved performance Simplifying portfolio and optimizing manufacturing footprint 19 Baxter R&D facility, Alliance Park, Belgium

20 Industry-Leading Performance Capital Allocation Just announced a 19% increase to the dividend this morning Represents a 65% increase from post-baxalta spin-off dividend rate 1 Executed selective share repurchases Investing in growth through acquisitions of Claris Injectables, Wound Care Technologies, and the RECOTHROM and PREVELEAK assets from Mallinckrodt, among others 1 Rate increased from $0.115/share (as first declared in October 2015) to $0.19/share (as announced on May 8, 2018) 20 Peritoneal dialysis patient, Hong Kong

21 Delivering Significant Value for Investors *Partial Month of May 1 Source: Bloomberg 21

22 Continuing Strong Momentum in 2018 and Beyond Increasing innovation to drive accelerated revenue growth Maintaining strong cadence of product launches and geographic expansions Realizing ongoing benefits of cost reduction initiatives and organization optimization Strategically deploying capital to enhance value and improve profitability Anticipating long-term guidance update during 2018 investor conference 22

23 2018 Annual Meeting of Stockholders May 8, 2018