Becton, Dickinson and Company

Hello and welcome to BD's first Fiscal Quarter 2026 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 at investors.bd.com or by phone at 800-753-5212 for domestic calls and area code 1-402-2212. 2673 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 Sean Bevec, Senior Vice President, Investor Relations. Please go ahead.

Good morning and welcome to BD's earnings call. I'm Sean Bevec, Senior Vice President of Investor Relations. 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 2026. The press release and presentation can be accessed on the IR website at investors.bd.com. Leading today's call are Tom Pollin, BD's Chairman, Chief Executive Officer and President, and Victor Roque, Senior Vice President and Interim Chief Financial Officer. Before we get started, I want to remind you that we will be making forward-looking statements. You can read the disclaimer in our earnings release and the disclosures in our SEC filings on our investor relations website. Unless otherwise specified, all comparisons will be made on a year-on-year basis versus the relevant fiscal period. Revenue percentage changes are on an FX-neutral basis unless otherwise noted. Also, references to adjusted EPS refer to adjusted diluted EPS. As a reminder, beginning October 1st, we began operating under our previously disclosed new BD segment structure that includes medical essentials, connected care, biopharma systems and interventional, and a fifth life sciences segment comprised of biosciences and diagnostic solutions. The financials discussed here and included in the earnings release and 10Q have been recast to reflect this reorganization. Reconciliations between GAAP and non-GAAP measures are included in the appendices of the earnings release and presentation. With that, I will turn it over to Tom.

Thank you, Sean, and good morning, everyone. Before we get started, I'd like to take a moment to welcome Sean to BD. We are very excited to have Sean join our team, and I look forward to partnering with him as we continue to communicate our strategy, performance, and growth opportunities. Turning to our Q1 performance, We delivered stronger than expected results, which reflect our disciplined execution, including accelerated commercial initiatives and strengthened our key growth platforms. Revenues of $5.3 billion increased 0.4%. New BD grew 2.5% with broad-based growth across the markets where we've been doubling down on investments. This includes double-digit growth in biologic drug delivery, PureWIC, advanced tissue regeneration, and pharmacy automation, and high single-digit growth in APM. We delivered mid-single-digit growth across 90% of NewBD's portfolio, partially offset by 10% of our portfolio, Alaris, vaccines, and China, undergoing challenging market dynamics that were in line with our expectations. We delivered adjusted gross margin of 53.4%, and adjusted EPS of $2.91, both of which were also ahead of our expectations on the strength of revenue performance and operational execution. Later this morning, we expect to close the combination of our life sciences business with Waters via reverse Morris Trust transaction. This is a significant milestone as we fully pivot to new BD and the next chapter of the company's growth. I want to thank both the BD and Waters team whose exceptional hard work and transaction experience are enabling us to close nearly two months ahead of schedule. We believe this transaction unlocks significant value for our shareholders through both participation in the new Waters entity and value creation in the new BD. As part of the transaction, we will receive a $4 billion cash distribution. I'm pleased to announce $2 billion will be deployed towards share repurchases through an ASR, and $2 billion will be deployed towards debt paydown. Both are expected to be executed in the near term, subject to market conditions. This is in line with our enhanced capital allocation strategy, which prioritizes share repurchases, a reliable and growing dividend, and focused tuck-in M&A in targeted high-growth markets. all designed to steadily increase return on invested capital. With the completion of our life sciences transaction, BD enters this next chapter as a far more focused pure play med tech company. This transformation builds on several years of deliberate portfolio shaping, including divesting three substantial non-core assets and the more than 20 strategic tuck-ins we've completed to strengthen our presence in some of the most attractive areas of healthcare, We recognized early on how the world of healthcare is changing rapidly. Providers everywhere are seeking partners who not only deliver high-quality products, but who can help them transform care pathways, improve outcomes, and reduce cost. As we've previously discussed, we've identified three key trends shaping the future of healthcare that have guided our portfolio strategy. These include, one, the rise of smart, connected devices, robotics, AI, and informatics that transform the cost and quality of care. Two, the shift of care towards lower cost, more convenient settings, including outpatient facilities and the home. And three, rapid growth in technologies to address chronic disease, one of the fastest growing segments in healthcare. Over the last several years, we've built multiple growth platforms, each with billion-dollar-plus potential that position NewBD squarely at the center of these trends. From our nearly $5 billion connected care business with AI-driven advanced patient monitoring and connected medication management to advanced pharmacy robotics to leading platforms for biologic drug delivery at home, urinary incontinence, vascular disease, and tissue regeneration. New BD is positioned to lead in advancing the future of care. We have leading positions in more than 90% of the markets we serve with over 90% of our revenues driven by recurring consumables. Every year we manufacture more than 35 billion devices that reach healthcare providers across more than 190 countries. Few companies in healthcare are as foundational to the daily delivery of care and that scale powers the strong free cash flow that underpins our strategy. While these trends guide where we innovate and invest, BD Excellence guides how we execute. Together, they shape our strategy for the new BD, Excellence Unleashed, which is expressed through our three strategic priorities, compete, innovate, and deliver. We've begun executing on these priorities and enhancing the speed and agility of the company, I'll share some examples of where we're seeing early positive momentum. Compete reflects how we're elevating our commercial capabilities to win in the fastest-growing parts of the market and deliver an exceptional customer experience. We made significant progress across our commercial initiatives this quarter, including planned Salesforce expansion and APM, PI, and advanced tissue regeneration, while accelerating initiatives to make PureWIC at home available for our veterans. We're also seeing broad-based commercial success across the company. The Pixis Pro launch is off to a good start, with 85% of initial orders coming from competitive conversions. Alaris delivered our strongest quarter of competitive wins since the relaunch, increasing our category share by approximately 100 basis points. Our medical essentials business also gained share across multiple categories and with major U.S. health systems, including in Flush, PICs, and catheters. Pharma systems delivered significant GLP-1 wins, with now over 80 novel and biosimilar GLP-1 molecules contracted in BD delivery devices. And BDI saw continued strength with notable conversions in oncology and peripheral arterial disease and strong adoption of recent launches of Puricflex and Galaflex. These results reflect the strong execution of our teams and the growing impact of our commercial initiatives. Turning to our second priority, innovate. Innovate focuses on how we bring high-impact solutions to market, executing a pipeline that's now stronger, more focused, and more productivity-driven than ever. This quarter, we strengthened our innovation pipeline by completing the reallocation of $50 million of central R&D to the businesses, to fund multiple new product innovations in our high-growth platforms. We also continued to scale BD Excellence into R&D, reducing development times and accelerating future launches by six to 12 months across several areas. In surgery, we entered several new markets, increasing our served markets by over $550 million in categories that offer higher growth, higher margin, and long-term strategic value. This includes the US launch of Avatine Flowable, a next-generation flowable hemostat that strengthens our position in biosurgery and enters us into a nearly $400 million market, growing approximately 5% annually. We also advanced our global wound irrigation portfolio with the European launch of Surgifor, a ready-to-use wound irrigation system that simplifies operating room workflows. In addition, we submitted Surgifor Pulse to the FDA, a pulse lavage system which can expand BD's presence in this nearly $200 million market by approximately 40%. Finally, in connected care, Hemisphere Stream began targeted market release in the U.S. and Europe following October's 510K clearance. Stream's smart cable compatibility can expand its addressable market tenfold, and early feedback has been very positive. Finally, our third priority, deliver, represents our commitment to operational excellence across safety, quality, delivery, and cash flow. As a result of the life sciences transaction and the network consolidation initiative that we began in FY22, we've created a meaningfully simpler manufacturing network, reducing our network by nearly half to under 50 global sites, lowering costs, improving resiliency, and enabling scaled smart factories. We have actions underway to improve this even further. BD Excellence continued to drive meaningful productivity improvements of 8% in the quarter, contributing to gross margin and cash flow. Finally, we achieved good progress on the $200 million cost-out program communicated last quarter, already executing actions representing $150 million or 75% of the target, with clear line of sight to the balance. We are pleased with our strategic progress, yet we recognize there's more work to do. This is an exciting moment for the new BD as we focus actions and raise our standards to out-compete, out-innovate, and out-deliver. With that, I'll turn it over to Vitor.