Abbott Laboratories

Good morning, and thank you for standing by. Welcome to Abbott's fourth quarter 2021 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 1 key on your touchtone phone. Should you become disconnected throughout this conference call, please redial the number provided to you and reference the 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 Express written permission. I would now like to introduce Mr. Scott Leinenweber, Vice President, Investor Relations, Licensing, and Acquisitions.

Scott Leinenweber Good morning, and thank you for joining us. With me today are Robert Ford, Chairman and Chief Executive Officer and Bob Funk, Executive Vice President, Finance and Chief Financial Officer. Robert and Bob will provide opening remarks. Following their comments, we will 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 2022. Abbott cautions that these forward-looking statements are subject to risks 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 Form 10-K for the year ended December 31, 2020. 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. 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 excludes the impact of foreign exchange. With that, I will now turn the call over to Robert.

Thanks, Scott. Good morning, everyone, and thank you for joining us. Today we reported another strong quarter and highly successful year for Abbott. For the year, we reported organic sales growth of 23% and ongoing earnings per share of $5.21, which reflects more than 40% growth compared to the prior year and exceeded the original EPS guidance we set last January. These last couple of years have truly been unique on many levels. The challenge throughout the pandemic has been the sheer breadth of its impacts, and for Abbott, It's reinforced the value of our diversified business model, which is uniquely balanced across multiple dimensions, including our business mix, customer and payer types, innovation cycles across our businesses, and geographic footprint. We've always said that our business model allows us more opportunities to win during the good times and makes us more resilient during the tough times, and never has this been put to the test more so than over the past couple of years. It's been tested by a major global pandemic and has proven to be highly resilient, delivering strong growth and returns for our shareholders. COVID testing has been a big part of this, of course. We delivered a billion tests last year and approximately 300 million in the fourth quarter alone and continue to play a significant role in the world's response to the pandemic. But just as importantly, we demonstrated Abbott's strength across our company, delivering strong growth across our businesses while continue to expand our portfolio with innovations that will fuel our success for years to come, regardless of the pandemic situation. Turning to our outlook for 2022, as we announced this morning, we forecast ongoing earnings per share of at least $4.70. which reflects nearly 50% growth compared to our pre-pandemic baseline in 2019. We forecast organic sales growth for our base business, excluding COVID tests, in the high single digits. And our guidance includes an initial COVID testing sales forecast of $2.5 billion. We're seeing very strong demand for testing to start the year with the recent emergence of the Omicron variant As you know, forecasting COVID testing demand for more than a few months at a time has been challenging. Therefore, our initial forecast compromises sales that we expect to occur in the early part of the year. And we'll update this forecast one quarter at a time over the remainder of the year. I'll provide more details on our 2021 results before turning the call over to Bob. And I'll start with nutrition, where sales grew nearly 6% in the fourth quarter and over 7.5% for the year. Adult nutrition delivered 9% growth for the quarter and double-digit growth for the year, led once again by Ensure, our market-leading complete and balanced nutrition brand, and Glucerna, our leading diabetes nutrition brand. In pediatric nutrition, U.S. sales growth of more than 10% for the year was led by strong growth of Pedialyte, our oral rehydration brand, and market share gains for Similac, our market-leading infant formula brand. During the past year, we continued to expand our nutrition portfolio with several new product and line extensions, including the launch of Similac 360 Total Care in the U.S. and continued global expansion of our Pedialyte, Lucerna, and Ensure brands, with line extensions such as plant-based, lower sugar, and high protein products. Turning to medical devices, continued recovery from the impact of the pandemic and strong growth in diabetes care drove sales growth of 16% in the quarter and nearly 20% for the year. In diabetes care, sales growth of nearly 30% for both the fourth quarter and full year was led by Freestyle Libre, our market-leading continuous glucose monitoring system. Libre sales grew over 35%, which translates to year-over-year growth of $1 billion to a total of $3.7 billion in 2021. This past year, we continued to strengthen our medical device portfolio with several pipeline advancements and launches. In the U.S., expanded Medicare reimbursement coverage for MitraClip, will make it possible for more people to benefit from this life-changing technology. We launched NeuroSphere Virtual Clinic, a first-of-its-kind technology that lets patients communicate with physicians and receive new treatment settings remotely. We received U.S. FDA approval for AMPLATS, or Ambulate Heart Device, which treats people with atrial fibrillation who are at risk of ischemic stroke. And we received U.S. FDA approval of our portico heart valve replacement system for people with severe aortic stenosis and CE mark for Navitor, our latest generation transcatheter aortic valve replacement system. Moving to established pharmaceuticals, or EPD, where sales increased nearly 6% in the fourth quarter and over 10% for the full year. Strong performance was broad-based. across several countries led by India, Russia, and China. EPD has performed well throughout the pandemic fueled by strong execution and a steady flow of new product introductions in our core therapeutic areas. I'll wrap up with diagnostics where COVID testing was a big part of the story, but far from all of it. COVID testing sales were $2.3 billion in the fourth quarter with rapid testing platforms. including BinaxNOW in the U.S., PanBio internationally, and IDNOW globally, compromising approximately 90% of those sales. Demand for testing continues to remain strong, and we remain committed to help ensure broad access. Since the start of the pandemic, we've invested significantly to build both U.S. and international manufacturing supply chains, and we're working to expand our capacity further to meet global demand. Excluding COVID testing sales, worldwide diagnostic sales grew over 8% in the fourth quarter and 13% for the year. We continue to roll out Alinity, our innovative suite of diagnostic instruments, and expand test menus across our platforms. During the year, we placed more than 3,000 Alinity instruments for immunoassay and clinical chemistry testing, with approximately two-thirds of those placements coming from share capture. And in molecular diagnostics, excluding COVID testing, sales grew double digits in both U.S. and internationally as we continue the rollout of our Linity M instrument for molecular testing. So, in summary, 2021 was another highly successful year for Abbott. We continue to play a vital role in combating COVID-19 as a result of our massive scale we built in rapid testing capacity. All four of our major businesses delivered strong performance this past year and are well positioned for continued success going forward. And we continue to strengthen our overall strategic position with a steady cadence of important new products from our pipeline in several attractive growth areas. I'll now turn over the call to Bob.