Abbott Laboratories

Good morning and thank you for standing by. Welcome to Abbott's fourth quarter 2019 earnings conference call. All participants will be able to listen only until the question and answer portion of this call. During the question and answer session, you will be able to ask your question by pressing the star one keys on your touchtone phone. Should you become disconnected throughout this conference call, please redial the number provided to you in reference to Abbott earnings call. This call is being recorded by Abbott. With the exception of any participants' questions asked during the question-and-answer session, the entire call, including the question-and-answer session, is material copyrighted by Abbott. It cannot be recorded or rebroadcast without Abbott's express written permission. I would now like to introduce Mr. Scott Leinenweber, Vice President, Investor Relations, Licensing, and Acquisitions.

Good morning, and thank you for joining us. With me today are Miles White, Chairman of the Board and Chief Executive Officer of Robert Ford, President and Chief Operating Officer, and Brian Yor, Executive Vice President, Finance and Chief Financial Officer. Miles will provide opening remarks. Brian will discuss our performance and outlook in more detail. Following their comments, we'll take your questions. Before we get started, some statements made today may be forward-looking for purposes of the Private Securities Litigation Reform Act of 1995, including the expected financial results for 2020. Abbott cautions that these forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological, and other factors that may affect Abbott's operations are discussed in Item 1A, Risk Factors, to our annual report on Securities and Exchange Commission Form 10-K for the year ended December 31, 2018. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law. Please note that financial results and guidance provided on the call today for sales, EPS, and line items of the P&L will be for continuing operations only. On today's conference call, as in the past, non-GAAP financial measures will be used to help investors understand Abbott's ongoing business performance. These non-GAAP financial measures are reconciled with the comparable GAAP financial measures in our earnings news release and regulatory filings from today, which are available on our website at Abbott.com. Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which is the Find Now earnings news release issued earlier today. With that, I will now turn the call over to Miles.

Okay, thanks, Scott. Good morning. Good morning. 2019 was another highly successful year for Abbott. Our focused execution resulted in strong financial performance, including ongoing earnings per share of $3.24, reflecting 12.5% growth on an absolute basis and even higher growth when excluding the impact of currency. All four of our businesses performed well, contributing to full-year organic sales growth of more than 7.5%, which is above the guidance range we set at the beginning of last year. The successful year was capped off by a strong fourth quarter with organic sales growth of 8.5%, including double-digit sales growth in medical devices, established pharmaceuticals, and core laboratory diagnostics, along with ongoing EPS growth of more than 17%. Our consistent, strong performance demonstrates that our business model is working exactly as intended. We've built the company very deliberately through a multi-year process to deliver superior results for years to come. We've shaped our businesses to align with important trends to make sure we're in the right places with the right products, and we've targeted businesses that are focused on some of the world's greatest health care concerns. For example, diabetes and cardiovascular disease are two of the most significant health care challenges of our lifetime. They're chronic, long-lasting, and dramatically increasing in prevalence around the world. Nearly every health care decision begins with a diagnostic test, and this testing not only occurs in the traditional hospital setting, but also increasingly at alternate sites such as physicians' offices, pharmacies, and even at home. Proper nutrition is a foundational element of good health across every stage of life, whether you're a newborn baby, a child striving to grow, or an aging adult working to overcome a health condition. And access to health care continues to expand rapidly in emerging markets where 85% of the world's population resides. We've shaped our company to achieve scale and leadership positions in all of these areas. The investments we've made and our focus on execution are working. Our product pipelines are strong, our operating culture is strong, and we're well positioned to achieve sustainable strong growth for years to come. For 2020, we're forecasting another year of top-tier financial performance. As we announced this morning, we forecast organic sales growth of 7% to 8%, and adjusted earnings per share of $3.55 to $3.65, reflecting double-digit growth. I'll now provide a brief overview of our 2019 results and 2020 outlook for each business, and I'll start with diagnostics, where sales grew 6.5% in the fourth quarter, led by double-digit growth in core laboratory testing. The rollout of Alinity continues to go well in Europe, where we're winning new business at a high rate, and successfully renewing existing contracts that come up for bid. We continue to expand our rollout of Alinity systems across multiple key markets, including the U.S., where last year we obtained FDA approval of Alinity for blood and plasma screening and have made significant progress obtaining regulatory approvals for a critical mass of our immunoassay and clinical chemistry test menu. I'll turn now to nutrition, where sales increased 6% in the quarter, led by strong growth across several countries and segments of our business, including Southeast Asia and Latin America, across both pediatric and adult nutrition, as well as above-market growth in the U.S. In pediatric nutrition, growth was driven by PediaSure, our nutrition solution to help kids grow and thrive, and Pedialyte, our oral rehydration product, which continues to see unprecedented uptake with both children and adults. In adult nutrition, global growth of 10%, in the fourth quarter was led by Ensure, our leading complete and balanced nutrition brand, and Glucerna, our leading brand for people with diabetes. Moving now to medical devices, where sales increased nearly 11.5% in the fourth quarter, led by double-digit growth in structural heart, diabetes care, electrophysiology, and heart failure. In structural heart, sales increased 17% in the fourth quarter, Over the last couple of years, our portfolio and long-term growth opportunities in this area have strengthened considerably. We've been building our position organically in this area for quite some time, when in 2017, the combination with St. Jude created what I now consider a best-in-class structural heart portfolio. MitraClip, our market-leading device for the minimally invasive treatment of mitral regurgitation, or leaky heart valve, is the cornerstone of our portfolio with annual sales this past year of nearly $700 million, growing 30%. Last year, we obtained an important new indication in the U.S. that significantly expands the number of people that can be treated with MitraClip. And just last week, we announced that we're initiating a clinical trial that offers the potential to expand the treatable patient population even further. Beyond MitraClip, several exciting technologies are expected to emerge from our structural heart pipeline in 2020, including CE mark approvals for TriClip, a first-of-its-kind technology to repair leaky tricuspid heart valves, and for Tendine, which targets replacement of the mitral valve, as well as U.S. approval of Portico for transcatheter aortic valve replacements. Turning now to diabetes care where sales increased nearly 35% in the quarter, led by Freestyle Libre, a revolutionary continuous glucose monitoring system. Several years back, we saw an opportunity to approach continuous glucose monitoring, or CGM, in a fundamentally different manner compared to others in the space. We challenged ourselves to rethink existing paradigms as we sought to develop a solution that would truly benefit the mass population of people living with diabetes around the world. That aspiration influenced every aspect of Libre, highly accurate, simple to use, particularly affordable, and easy for patients to access. The results of our unique approach have been remarkable by any measure. Libre has quickly become the global market-leading wearable CGM. Its user base has roughly doubled each year to its current level of approximately 2 million users globally, including the highest user base among CGMs in the U.S., Reimbursement coverage has ramped up quickly around the world as payers increasingly recognize its highly differentiated value proposition. And it's the only CGM that's widely available through the pharmacy channel, which is a significant benefit for patients as it simplifies the process of acquiring the product. In 2019, Libre achieved full-year sales approaching $2 billion, an increase of 70% versus the prior year. And importantly, as we planned for the substantial growth opportunity to come, we significantly expanded our manufacturing capacity to keep up with anticipated demand for this life-changing technology. Now I'll wrap up with established pharmaceuticals, or EPD, where sales increased 10% in the quarter, led by growth across several geographies in Latin America and Asia. For the full year, sales increased 7% for the second year in a row, as this business continues to execute its unique branded generic strategy in emerging markets. These markets are growing rapidly, their populations are aging, their middle classes are expanding, and healthcare spending is increasing due to improving access to healthcare. Our strategy to build significant presence and scale in these markets is unique and continues to result in strong growth. So in summary, this was another highly successful year with strong performance across our businesses. We continue to strengthen our leadership positions in some of the largest and fastest-growing areas in healthcare, and we're entering 2020 with great momentum across our businesses and targeting another year of strong organic sales growth and double-digit EPS growth. I'll now turn the call over to Brian to discuss our 2019 results and 2020 outlook in more detail. Brian? Thanks, Miles.