Abbott Laboratories

Good morning and thank you for standing by. Welcome to Abbott's first quarter 2023 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 1 keys on your touch tone telephone. 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 Lineweber, Vice President, Investor Relations, Licensing and Acquisitions.

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'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 2023. 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 Form 10-K for the year ended December 31, 2022. 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. Note that Abbott has not provided the GAAP financial measure for organic sales growth on a forward-looking basis because the company is unable to predict future changes in foreign exchange rates, which could impact reported sales growth. Unless otherwise noted, our commentary on sales growth refers to organic sales growth, which is defined in the quarterly results press release issued earlier today. 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 strong results to start the year. First quarter adjusted earnings per share were $1.03, which was above consensus estimates, driven entirely by strong underlying base business performance, excluding COVID testing. Organic sales growth excluded COVID testing increased 10%, led by double-digit growth in medical devices, established pharmaceuticals, and nutrition. As you'll recall, back in January, I expressed some optimism that the headwinds Abbott and other companies faced over the last few years were starting to peak and in some cases ease a bit. As we move through the first part of the year, That's exactly what we continue to see. Most notably, the impact of COVID has rapidly and significantly lessened. As part of this transition, certain behavioral shifts have been evident across society. One simple illustrative example has been the significant increase in travel and tourism we've all seen, heard about, or experienced firsthand. A much more relevant and important behavioral shift that we're seeing in healthcare globally has been the increased priority people are putting on getting healthy and staying healthy. And for our businesses, the impacts have been increased routine diagnostic testing volumes, improved medical device procedure trends, and strong demand for consumer-based health products. The net results this past quarter was strong, broad-based growth across our portfolio. Importantly, this growing focus on health adds to and enhances other favorable demographic trends, such as a global population that's growing older and living longer and increasing access to healthcare around the world. The combination of these favorable market dynamics along with the strength of our growth platforms and new product pipeline, provides a strong foundation for sustainable top-tier growth going forward. I'll now summarize our first quarter results in more detail before turning the call over to Bob. I'll start with established pharmaceuticals, or EPD, where sales increased 11% in the quarter. This continues EPD's impressive stretch of consistent strong performance, including double-digit growth each of the last two years. Growth this past quarter was led by strong performance in Brazil, China, and Southeast Asia, and across several therapeutic areas, including cardiometabolic, gastroenterology, CNS, and pain management. Turning to nutrition, where sales increased more than 10% in the quarter. In the US, pediatric nutrition growth of more than 35% included the impact of lower sales in the first quarter of last year due to a voluntary recall of certain infant formula products. We continue to make good progress, increasing manufacturing production and recovering market share in this business. Internationally, total nutrition sales grew mid-single digits overall, and sales in global adult nutrition also grew mid-single digits, driven by strong performance of our market-leading Ensure brand. Moving to diagnostics, where as forecasted, sales growth was negatively impacted by a significant decrease in COVID testing sales compared to the first quarter of last year. Excluding COVID testing, Organic sales growth was led by mid to high single-digit growth in core lab, rapid, and point-of-care diagnostics. In core lab diagnostics, growth was led by strong performance in the U.S. and Europe, which was partially offset by soft market conditions in China early in the year, though we're seeing improving market demand over the last several weeks. Excluding China, core laboratory diagnostic sales grew nearly 8% globally. And I'll wrap up with medical devices, where sales grew 12.5% globally on an organic basis, including mid-teens growth in the US and double-digit growth internationally. In diabetes care, sales of Freestyle Libre grew more than 25% on an organic basis in the quarter, including approximately 50% growth in the US and mid-teens internationally. During the quarter, Libre received U.S. FDA clearance for connectivity with automated insulin delivery systems. We're working with leading insulin pump manufacturers to integrate their systems with both Libre 2 and Libre 3 as soon as possible. In cardiovascular devices, sales grew more than 8% overall in the quarter. And impressively, organic sales growth rates improved sequentially compared to the prior quarter in every one of our cardiovascular device businesses. This broad-based strength was led by strong double-digit growth in heart failure and structural heart. In heart failure, sales of CardioMems grew more than 30%, which represents the third quarter in a row that CardioMems sales have grown more than 25%. In electrophysiology, performance was led by high teens' growth in Europe, including strong broad-based performance across big five European countries, which was driven by cardiac ablation catheters and mapping systems. In structural heart, growth was led by double-digit growth of MitraClit, along with strong contributions from three recently launched products, Amulet, Navitor, and Triclit, which combined to grow nearly 50% in the quarter. And lastly, in neuromodulation, sales grew 11%, driven by a recent launch of Eterna, our first rechargeable neurostimulation device for pain management, which targets a large segment of the market where we didn't previously compete. So in summary, we're off to a very good start to the year, exceeding financial expectations on both top and bottom lines. The strong performance we're achieving is broad-based and fueled by strong execution, new products, and improving market conditions. And our core foundational growth platforms have strong momentum and are achieving exceptional results, positioning us well for top-tier growth going forward. And I'll turn over the call to Bob.