Baxter International (BAX) Wells Fargo 21st Annual Healthcare Conference summary

Strategic initiatives and organizational changes

• Decentralized structure with independent P&Ls to drive customer impact, innovation, and operational performance.

• Launched the GPS (Growth and Performance System) for continuous improvement and cultural change.

• Focused on stabilizing the business and aggressive debt repayment to enable future capital allocation.

• Hired a new CFO with turnaround and med tech experience to support the next phase of growth.

• Ongoing portfolio assessment with emphasis on invest-and-grow areas, sustaining core businesses, and pruning as needed.

Financial performance and outlook

• Achieved 5% operational growth in Q2 and raised full-year guidance to 2%-3% growth.

• Second half of the year expected to match or exceed first half growth, supported by strong order book and product demand.

• Margin expansion in the second half driven by higher volumes, cost actions, and cycling through higher-cost inventory.

• Capital allocation remains focused on reducing net debt to EBITDA to 3x by year-end, aided by a recent $850 million debt reduction.

• No updates on 2027 guidance; focus remains on executing 2026 targets and managing headwinds from TSAs and one-time tariff benefits.

Business segment updates and product innovation

• Advanced Surgery and compounding businesses performing well, with strong growth in ANZ and Western Europe.

• Injectables and anesthesia faced supply chain challenges, but internal issues largely resolved and contract manufacturer support ongoing.

• Infusion Systems expected to grow in the second half, with Spectrum pump demand highlighted.

• Novum IQ field corrections progressing, with steady improvement and ongoing regulatory alignment.

• New product launches include Connect 360 Monitor, Dynamo stretcher, and IQX integration, with positive customer feedback.