Becton, Dickinson and Company

Please stand by, your program is about to begin. Hello and welcome to BD's first fiscal quarter 2024 earnings call. At the request of BD, today's call is being recorded and will be available for replay on BD's investor relations website Investors.bd.com or by phone at 800-688-7339 for domestic calls and area code plus 1-402-220-1347 for international calls. For today's call, all parties have been placed on a listen-only mode until the question and answer session. I will now turn the call over to Greg Roditas, Senior Vice President, Treasurer, and Head of Investor Relations.

Good morning, and welcome to BD's earnings call. I'm Greg Roditas, Senior Vice President, Treasurer, and Head of Investor Relations. On behalf of the BD team, thank you for joining us. This call is being made available via audio webcast at BD.com. Earlier this morning, BD released its results for the first quarter of fiscal 2024. We also post an earnings presentation that provides additional details on our business, strategy, and performance. The press release and presentation can be accessed on the IR website at investors.bd.com. Leading today's calls are Tom Poland, BD's Chairman, Chief Executive Officer and President, and Chris DeLorifus, Executive Vice President and Chief Financial Officer. Tom will provide highlights of our performance and the continued execution of our BD2025 strategy. Chris will then provide additional details on our Q1 financial performance and our updated guidance for fiscal 2024. Following the prepared remarks, Tom and Chris will be joined for Q&A by our segment presidents. Mike Garrison, president of the medical segment, Dave Hickey, president of the life sciences segment, and Rick Bird, president of the interventional segment. Before we get started, I want to remind you that we'll be making forward-looking statements. I encourage you to read the disclaimer in our earnings release and the disclosures in our SEC filings, which are both available on the Investor Relations website. Unless otherwise specified, all comparisons will be on a year-over-year basis versus a relevant period. Revenue percentage changes are on an FX-neutral basis unless otherwise noted. When we refer to any given period, we are referring to the fiscal period unless we specifically note it as a calendar period. I would also call your attention to the non-GAAP reconciliations included in the appendices of the press release and earnings presentation. With that, I am very pleased to turn it over to Tom.

Thanks, Greg. Good morning, everyone, and thank you for joining us. Earlier today, we reported our results for the first quarter. Overall, we executed Q1 as expected. Total revenue growth was largely in line with our expectations. And on the bottom line, adjusted EPS was ahead of our expectations due to good execution on our margin goals through our BD Excellence operating system and the timing of a discrete tax item. Also consistent with our plan, we delivered very strong growth in cash flow that positions us well to deliver another year of growing free cash flow double digits. I want to thank our team of over 70,000 associates for the strong execution, agility, and unrelenting determination to deliver for our customers, patients, and shareholders. These results give us the confidence to increase our FY24 guidance. Turning to our BD2025 strategy, during Q1, we continued to execute well against the five actions we outlined at our investor day to drive profitable growth and value creation. This includes continuing to advance our innovation pipeline, which supports our durable 5.5% plus targeted revenue growth profile. We remain focused on advancing innovation in high growth areas anchored against three irreversible forces we see reshaping healthcare today and over the next decade. Connected care, new care settings, and chronic disease. Specifically in Q1, we made meaningful progress achieving several key R&D milestones for technologies that position BD as key enablers of care shift to new settings. In our PureWIC portfolio, which is now the market's leading platform for non-invasive urine management, in a billion-dollar market growing double digits, we started our randomized clinical trial pilot for PureWIC female to generate evidence to support future at-home reimbursement. Our PureWIC program is progressing well and we remain on track to launch our next generation female external catheter later this fiscal year, which will provide a better patient experience and a more dignified way for women to manage their urinary incontinence. In Q1, we received 510 clearance for our new BD MiniDraw capillary blood collection system. Based on a recent study, two-thirds of patients prefer MiniDraw's finger stick collection in a retail setting. over a previous experience with a traditional venous blood draw. Since it does not require a phlebotomist, MiniDraw can expand access to sample collection for several routine blood tests to new settings, such as retail clinics and pharmacies. And lastly, in molecular diagnostics, we initiated clinical trial enrollment for the BD-Eliance point-of-care molecular platform. And our first assay, a rapid CT-GC test for in-office testing and treatments. BD Alliance enables BD to enter into the high-growth molecular point-of-care market. We continue to see molecular diagnostics as a strong growth catalyst as evidenced by double-digit growth this quarter in our BD Core and BD Max platforms, where we continue to leverage our growing installed base through menu expansion with more than 20 assays currently available on BD Max. Both NextGen PureWik and BD MiniDrawl are on track to launch later this fiscal year, and we anticipate our first 510 case submission for the BD-Eliant system and our first assay this fiscal year as well. Regarding Alaris, servicing our customers and bringing all Alaris pumps in the field up to the cleared standard remains our priority. Customer response has been very positive with strong momentum engaging with customers, and while it is still early in the process, I'm pleased with our progress, and as we recently shared, we now believe $200 million is the floor on revenue in fiscal 24. We are also executing well on our broad simplification strategy to drive margin expansion and a double-digit base EPS CAGR through FY25. This includes accelerating adoption of our BD Excellence operating system, which focuses on the application of lean principles to drive excellence everywhere, every day, across our plants and business, and is driving productivity gains across our operations. In FY23, we held 18 week-long Kaizen events, and in Q1 FY24 alone, we executed as many, a trajectory which will continue through the rest of FY24. We've deployed this mindset outside of our factories, driving greater efficiency through the organization at all levels. Our BD Excellence operating system is an important new capability we're building to drive a world-class culture of continuous improvement and lean management throughout BD. We also progressed our project recode initiatives, including our network optimization effort to drive plant efficiencies. We have multiple site consolidations either completed or underway to reduce our footprint by approximately 20%. The combination of BD excellence with our Recode Network architecture program is supporting our FY24 goals, contributing to our plan for 25% operating margins in FY25, and also now providing visibility for continued margin expansion beyond FY25. We're also seeing our systematic focus on cash flow continuing to yield results. Through working capital efficiencies and our BD Excellence operating system driving more efficient capex spend, we delivered over $850 million in operating cash flows in Q1. This strong execution to start the year positions us well to deliver double-digit growth in free cash flows in FY24 and positions us to capitalize on M&A opportunities in higher growth categories and opportunistically return cash to shareholders. Lastly, our teams around the world continue to make meaningful advancements on our ESG strategy. Just last week, we announced a collaboration with the Kenyan government to advance access to critical cancer diagnostics for women in Kenya through self-sampling, furthering our commitment to expanding health equity and access around the world. We see the power of this self-sampling model as applicable across other underserved markets as well as in the U.S. In summary, I'm pleased with the progress we made in Q1 and the solid margin execution, which enables us to raise guidance for fiscal 2024. With strong progress of our innovation pipeline and growing momentum from BD Excellence and our simplification programs, we believe we are well positioned to achieve our BD 2025 goals. With that, let me turn it over to Chris to review our financials, guidance, and outlook.