Becton, Dickinson and Company

Hello and welcome to BD's fourth quarter and full year fiscal 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 800-839-1337 for domestic calls and area code plus 1-402-220-0489 for international calls. For today's call, all parties have been placed in 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. Please go ahead.

Good morning, and welcome to BD's earnings call. I'm Greg Roditas, Senior Vice President, Treasurer, and Head of Investor Relations. Thank you for joining us. This call is being made available via audio webcast at BD.com. Earlier this morning, BD releases results for the fourth quarter and full year of fiscal 2024. The press release and presentation can be accessed on the IR website at investors.bd.com. Leading today's call are Tom Poland, BD's Chairman, Chief Executive Officer and President, and Chris DeLaurifus, Executive Vice President and Chief Financial Officer. Following this morning's prepared remarks, Tom and Chris will be joined for Q&A by our second president, Mike Garrison, President of the Medical Segment, Mike Feld, President of the White 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. You can read the disclaimer in our earnings release and the disclosures in our SEC filings available on the Investor Relations website. Unless otherwise specified, all comparisons will be made on a year-over-year basis versus the relevant fiscal periods. Revenue percentage changes are on an FX-neutral basis unless otherwise noted. Reconciliations between GAAP and non-GAAP measures are included in the appendices of the earnings release and presentation. With that, I am very pleased to turn it over to Tom.

Thanks, Greg, and good morning, everyone. First, I'd like to take a moment to welcome Mike Feld, president of our Life Science segment, who joined BD in August from Veralto. Mike is known for building innovative, high-performing teams and his leadership principles are well aligned with BD's culture. Mike also brings deep experience in Shinkijutsu Kaizen, which is the heartbeat behind BD Excellence. There is no individual more suited to lead the life sciences team as they continue to expand the value BD brings to our customers, and I look forward to Mike's partnership as we deliver on our strategy. Earlier today, we reported strong Q4 results with 7.4% revenue growth or 6.2% organic growth. 120 basis points of margin expansion, and adjusted diluted EPS up 11.4%. For the full year, we delivered solid organic revenue growth of 5%. Despite fiscal 24 revenue growth that was below our initial expectations, we were pleased with how we navigated complex market dynamics in China and bioscience pharma. Breaking things down, our med tech and diagnostics businesses grew a strong 5.9% this year, inclusive of absorbing a decrease in China, while our bioscience pharma businesses grew about 1%, roughly in line with the end markets. Over the long term, we see bioscience pharma as a durable, higher growth contributors to our portfolio, and we remain confident in gradual market recovery, our competitive position, and the team's execution. We consistently executed on margin expansion in FY24, increasing adjusted EPS guidance each quarter and delivering full-year EPS of $13.14, adjusted operating margin of 24.2% and free cash flow of $3.1 billion, all ahead of our original plan and positioning us well moving into FY25. I'd like to thank our global team of associates whose passionate commitment and focused execution of our strategy is making meaningful impact for the customers and patients we serve. Reflecting more broadly on our strategic direction and progress this past year, We made important advancements on each of our top three priorities, which are one, drive sustained top line growth through high impact innovation and commercial excellence. Two, execute on BD excellence to drive operational performance. And three, effectively deploy capital. First on growth, we advanced multiple new growth platforms that put BD in the middle of the most significant trends reshaping healthcare. including the use of AI and automation in connected care to transform efficiency and outcomes, the shift to new care settings, and the application of medical technology to improve treatment of chronic disease. Starting with our BD medical segment, new biologic drugs promise to have the most significant impact on chronic disease in the history of modern medicine. In FY24, we passed $1 billion of annual revenue in biologic drug delivery sales, driven by our leading pre-fillable devices and increased manufacturing capacity to serve growing GOP1 demand. As the leader in biologics drug delivery, and with a growing pipeline of targeted innovation, such as our Libertas and Evolve wearable devices, we believe no company is better positioned than BD to capitalize on a significant growth opportunity. We continue to advance our platform for pharmacy robotics, which now ranks as one of the largest robotics businesses in med tech and is enabling the transformation of retail, online, and hospital pharmacies with significant opportunity for future growth. We're also extremely pleased with the first year of the Alaris return to market and its role in our connected medication management strategy. We exited the year at our historical revenue run rate and continue to see strong customer preference for the Alaris power of one. Our acquisition of advanced patient monitoring in FY24 expands our connected care solutions in a high growth market and enables future innovation opportunities in breakthrough closed-loop monitoring and treatment, which BD is uniquely positioned to deliver across our platforms. Integration is going as expected, and the commercial teams are fully engaged in maximizing the benefits of APM for our customers. In BD Interventional, we had a fantastic year advancing our PureWIC urinary incontinence platform, launching our next-gen PureWIC Flex and expanding PureWIC Male into the home. In our advanced tissue regeneration portfolio, Phasix and Galliflex are additional examples of how our tuck-in M&A strategy is now driving strong organic growth. We continue to transform hernia surgery and are expanding this platform into new applications for plastic and reconstructive procedures driven by trends in aging and GLP-1 weight loss, which increasingly call for soft tissue support to restore function and improve appearance. Across BD Life Sciences, we continue to reinvent the field of flow cytometry with the launch of the three and four laser facts discover, S8 sorter, and multiple new reagents using unique AI algorithms to optimize dye designs that are enabling new scientific insights. In diagnostics, Our new high throughput molecular platform BD Core and OnClarity HPV assay continued to gain traction with self-collection and new care settings for cervical cancer screening now available in many countries around the world, representing a meaningful new growth opportunity for BD. While these and other new BD innovations are playing a key role in transforming care, most every significant healthcare procedure uses a BD Core device. Whether robotic surgeries, a valve transplant, new cancer treatment, or advanced vascular procedures, BD syringes, catheters, pumps, surgical prep, blood collection, and other products are there. In FY24, we saw strong growth across our core devices driven by share gains and procedural volumes. Turning to operational performance, we launched BD Excellence about 18 months ago. And it's been incredible to see the momentum behind simplifying our company, improving quality, and accelerating margin progression. Through BD Excellence, our teams made strong progress on network optimization, increasing plant productivity, and delivering double-digit improvements in waste and operating equipment efficiency, or OEE. All of this drove margins, EPS, and cash flow above plan. We have much more headroom going forward through BD Excellence, and it positions us well to deliver on our goals for FY25 and beyond. On our third priority of strong stewardship of value-creating capital deployment, our focus on cash generation enabled strong growth in free cash flow, increased free cash flow conversion, and allowed us to return capital to shareholders through dividends and share buybacks. Earlier this morning, we announced our 53rd consecutive year of dividend increases, extending our longstanding recognition as a member of the S&P 500 Dividend Aristocrats Index, a distinction that reflects the consistency and reliability of our dividend policy. Meaningful return of capital to shareholders will remain a key priority in our capital allocation strategy going forward. Beyond those priorities, in FY24, we expanded our position as a leader in corporate responsibility, with significant progress towards our 2030 corporate sustainability goals. We became one of a handful of med tech companies to have near and long-term greenhouse gas emissions reduction targets and net zero targets approved by the science-based target initiative. We surpassed both our scope one and scope two greenhouse gas emissions targets. And as part of our ongoing health equity strategy, we advanced partnerships around the world in areas such as improving access to cervical and breast cancer screening. We are pleased to be recognized for our efforts most recently being named to 3BL's list of the 100 best corporate citizens and ranking in the top two in healthcare. Looking ahead to FY25, we will continue to execute in alignment with each of those three priorities. We have more than 25 planned new product launches this year. And calling out just a few, in BD Medical, we're launching our next generation PIXUS platform, which includes a cadence of hardware and software upgrades and releases which will begin to roll out by the end of calendar year 25 and continue for the next several years. This will be the first system to use BD's new advanced AI platform that will integrate data across BD smart devices. We have a number of new launches planned in our advanced patient monitoring business to revolutionize hemodynamic monitoring. The next-gen Hemisphere Alta Monitor will feature a full range of sensors enabled with predictive IQ algorithms that provide comprehensive pressure, flow, and tissue oxygenation insights for varying acuities. New Swann IQ and Foresight IQ smart sensors will provide new patient insights, including new-to-world right heart pressures and cerebral oxygenation. In BD Life Sciences, we plan to launch the first BD Facts Discover Analyzer, the A8, to provide customers high-throughput sample analysis with the same innovative technologies as our breakthrough self-sorter. And lastly, in BD Interventional, in our PureWik platform, we're advancing the pivotal study for at-home reimbursement and expect to continue the cadence of innovation with the launch of PureWik Portable, a solution that restores mobility to people's lives. We look forward to sharing a full portfolio update at our Investor Day on February 26th at the New York Stock Exchange. We believe we are well-positioned heading into FY25, with the strength of our portfolio enabling us to effectively navigate market dynamics and the momentum of BD Excellence driving margin expansion to deliver a strong earnings and cash profile. I'll now turn it to Chris to provide further color on our financials and outlook.