Core Insights - Solventum's AI-powered radiology speech reporting solution, Solventum™ Fluency™ for Imaging, has been recognized as 1 in the 2025 Best in KLAS Awards for the fifth consecutive time [1][3]. Company Overview - Solventum focuses on enhancing healthcare through innovative solutions that integrate health, material, and data science, aiming to improve patient care and empower healthcare professionals [4]. Product Features - Solventum Fluency for Imaging enables faster and more accurate documentation, helping radiologists save time, reduce burnout, and improve efficiency by streamlining the reporting process [2]. - The technology integrates seamlessly into existing radiology workflows, allowing for quicker report creation while minimizing administrative tasks and rework [2]. Customer Feedback - Dr. Charles Q. Li from the Allegheny Health Network highlighted the exceptional voice recognition accuracy and reliability of Solventum's solution, noting its positive impact on radiologists' efficiency and job satisfaction [3]. - The KLAS Awards are based on customer feedback collected through confidential interviews and product evaluations, emphasizing the importance of value, product quality, loyalty, relationships, operations, and culture in healthcare technology [3]. Industry Context - The recognition from KLAS reflects Solventum's commitment to helping radiology practices deliver high-quality care while managing costs effectively [4].

Core Points - Solventum (NYSE: SOLV) will release its fourth quarter fiscal year 2024 financial results on February 27, 2025, after U.S. financial markets close [1] - Following the results release, management will host a webcast to discuss the results and the fiscal year 2025 outlook [1] - An Investor Day is planned for March 2025 in New York City to introduce the company's growth strategy and long-range financial plan [3] Earnings Webcast Details - The earnings webcast is scheduled for February 27, 2025, at 3:30 p.m. CST / 4:30 p.m. EST [2] - The webcast can be accessed via the company's investor relations website [2] - A replay of the webcast and additional financial disclosures will be available on the website [2] Company Overview - Solventum focuses on enabling better healthcare through innovative solutions at the intersection of health, material, and data science [4] - The company aims to create breakthrough innovations that improve patients' lives and empower healthcare professionals [4]

Company Performance and Potential - Solventum, formerly 3M's Health Care division, has high-quality businesses that delivered consistent performance within 3M, but its separation has not lived up to potential, with current performance significantly lower than when it was part of 3M [2][3] - Solventum's shares are currently trading at $69, but Trian believes the company could be worth $140 by year-end 2027 if it restores performance to historical levels [1][12] - Solventum's profit margins have declined nearly unprecedentedly since the spin-off, with consensus estimates expecting a 425bps decline in its first full standalone year, making it a bottom decile performer [6][8] Historical Context and Spin-Off Analysis - Prior to the spin-off, 3M research analysts estimated Solventum would be valued at $33 billion, implying a share price more than double its current trading price [3] - Solventum was 3M's best-performing business, consistently the fastest-growing and highest-margin division, but as an independent company, it has struggled to maintain growth and margins [7] - The average mid-to-large cap spin delivered approximately +125bps and +160bps of margin expansion in the first and third full year following separation, while Solventum's margins have declined significantly [6][8] Strategic Recommendations - Solventum should focus on improving operating performance, portfolio actions, and prudent capital allocation to enhance value creation [1] - Simplifying Solventum's portfolio, particularly by addressing non-core segments like Dental Solutions, Health Info Systems, and Purification & Filtration, could improve focus and execution [10][12] - Divestitures of non-core businesses could accelerate deleveraging and enable value-enhancing capital allocation decisions, including dividends, share repurchases, and bolt-on M&A [12] Long-Range Plan and Shareholder Engagement - Trian has initiated dialogues with Solventum's management and board, urging the company to act with urgency to reverse declines and communicate a more ambitious Long-Range Plan (LRP) [4] - The LRP should aim to restore Solventum's performance to historical levels, with growth targets of 3% to 4% organically and EBIT margins of 26%-27%, similar to its performance within 3M [12] - Trian believes historical performance levels and spin-related opportunities should frame Solventum's operating targets and broader strategy [12]

Core Insights - The T1D Fund has appointed Elizabeth Mily as CEO to enhance its leadership and investment strategy, focusing on type 1 diabetes (T1D) solutions [1][2] - Mily brings over 30 years of experience in pharma, healthcare investment banking, and strategic leadership, aiming to expand equity investments and partnerships [1][3] - The T1D Fund is positioned as an impact investor, working with biopharma to develop innovative therapies for T1D [4] Company Overview - The T1D Fund is an impact investment fund established in December 2016, dedicated to accelerating solutions for treating, preventing, and curing type 1 diabetes [5] - It is the first scaled, mission-driven venture impact fund focused on catalyzing the development of T1D cure-oriented therapies through equity investments [5] - The Fund collaborates with leading organizations like Breakthrough T1D and the Helmsley Charitable Trust to align its focus on T1D research [5] Leadership and Strategy - Elizabeth Mily previously served as Executive Vice President at Bristol Myers Squibb, overseeing company strategy and business development [3] - Mily's leadership is expected to enhance the T1D Fund's investment team and strategic partnerships, aiming to create an ecosystem for new therapies [1][4] - The Fund's unique position allows it to proactively engage with biopharma to bring innovative therapies to market [4]

Company Participation in Industry Events - Solventum executives will participate in a fireside chat at the Piper Sandler 36th Annual Healthcare Conference on December 4, 2024, at 11:30 a.m. ET in New York, NY [1] - A live and archived replay of the fireside chat will be available on the company's website at investors.solventum.com [1] Company Overview - Solventum focuses on enabling better, smarter, and safer healthcare to improve lives [2] - The company pioneers innovations at the intersection of health, material, and data science to address customers' toughest challenges [2] - Solventum aims to empower healthcare professionals and improve patients' lives through breakthrough solutions [2]

Core Insights - Solventum (SOLV) has launched the 3M Clarity precision grip attachments for Clarity aligners, marking a significant advancement in aligner technology by addressing challenges in clear aligner treatments [1][2] - Despite the launch, SOLV's shares fell 3.1% on November 14, continuing a month-long downtrend, with a 1.7% decline since its IPO on April 1, 2024, while the industry declined by 11.2% and the S&P 500 gained 14.6% during the same period [2] Innovative Features of Clarity Attachments - The Clarity precision grip attachments eliminate the technique-sensitive and time-consuming attachment creation process, reducing variability in treatment [4] - These attachments are stain-resistant due to a blend of inorganic filler and organic resin, ensuring they remain discreet and aesthetically pleasing throughout treatment [5] - Clarity attachments simplify the clinical process by minimizing the risk of "composite flash," making the attachment process faster and less prone to error, leading to greater predictability in treatment outcomes [6] - The 3D printing manufacturing approach allows for customization to fit each patient's unique tooth anatomy [7] Market Potential and Future Development - The global clear aligners market was valued at approximately $3.8 billion in 2023 and is expected to exceed $28.15 billion by 2032, growing at a CAGR of 25.2% [8] - Key drivers for clear aligners demand include the rising prevalence of malocclusion, technological advancements, increased healthcare spending, and growing aesthetic demands in developing nations [9] - Solventum is pursuing regulatory approvals for Clarity attachments in other global markets and plans to enhance its product line with further advances in 3D printing and material science [7]

Clarity Precision Grip Attachments are fully cured, pre-loaded and precisely resemble the digital treatment plan after bonding ST. PAUL, Minn., Nov. 14, 2024 /PRNewswire/ -- This month, Solventum (NYSE: SOLV), formerly 3M Health Care, officially launched an anticipated innovation in aligner treatment, 3M™ Clarity™ Precision Grip Attachments. Available exclusively with 3M™ Clarity™ Aligners, Clarity Precision Grip Attachments are designed to solve one of the biggest challenges with aligner treatment – creati ...

Financial Data and Key Metrics Changes - For Q3 2024, sales reached $2.1 billion, reflecting a 30 basis point increase on an organic basis and a 40 basis point increase in reported growth, slightly exceeding expectations due to order timing in the U.S. [32] - Gross margins were 57.3%, down 100 basis points year-over-year but up 180 basis points sequentially, including approximately 100 basis points of one-time benefits [38] - Adjusted operating income was $475 million, translating to an operating margin of 22.8%, ahead of expectations [40] - Earnings per share (EPS) for the quarter was $1.64, surpassing expectations [41] - Free cash flow generated in Q3 was $75 million, bringing the year-to-date total to $712 million [42] Business Line Data and Key Metrics Changes - The MedSurg segment generated $1.2 billion in sales, a 1% organic increase, driven by growth in antimicrobial IV site management solutions [34] - The Dental segment reported $313 million in revenue, a decline of 3.9%, attributed to challenging market conditions and tough year-over-year comparisons [35] - The Health Information Systems segment contributed $326 million, a 1.5% increase, benefiting from growth in the revenue cycle management platform [36] - The Purification and Filtration segment saw $238 million in sales, a slight decline of 0.3%, impacted by decreases in drinking water filtration and dialysis membranes [37] Market Data and Key Metrics Changes - Foreign exchange impacts were approximately neutral for the quarter, with price remaining flat and volume slightly favorable [33] - The company anticipates foreign currency to be a headwind in Q4, with an expected unfavorable impact of approximately 50 basis points for the full year [44] Company Strategy and Development Direction - The company is focused on a phased approach to transform the business, with Phase 1 emphasizing stabilization and separation, Phase 2 targeting long-range growth potential, and Phase 3 involving portfolio optimization [13][17][26] - The strategy includes selecting faster growth markets and growth driver initiatives to enhance scale and share [18][20] - Recent product launches in various segments are seen as critical to driving future growth, with a focus on increasing capacity and commercial structure to support adoption [21][22][23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made since the spin-off from 3M, noting that revenue growth remains below market but is expected to improve with ongoing investments [28] - The company raised its full-year organic sales growth guidance to the upper half of the range of flat to 1% and increased EPS guidance to $6.50 to $6.65 [44][45] - Management acknowledged the challenges ahead, including the annualization of costs post-spin and the need for continued investment in operations [53][54] Other Important Information - The company paid down $200 million of debt during the quarter, demonstrating a commitment to maintaining an investment-grade rating [10][43] - The implementation of new ERP systems is ongoing, with initial successes in four countries and plans for global rollout [30][96] Q&A Session Summary Question: Q4 EPS guidance and implications for 2025 EPS - Management noted that Q4 EPS guidance reflects one-time benefits in Q3 that will not recur, impacting Q4 performance [50][52] - 2025 EPS guidance is not yet provided, but management indicated that costs from the spin-off will pressure margins [53][54] Question: Portfolio management and dilution considerations - Management has not communicated specific portfolio management updates yet, but any decisions will consider shareholder value [58][59] Question: Timeline on Transition Services Agreements (TSAs) - Management stated that TSAs are in place for two to twelve years, with updates expected as timelines approach [61] Question: Market dynamics in the Dental segment - Management acknowledged market softness but emphasized that their portfolio is less impacted than competitors [72] Question: Drivers of gross margin changes - Management explained that gross margin fluctuations are due to one-time benefits and the impact of the 3M supply agreement [77] Question: ERP transition progress - Management highlighted the importance of ERP systems for the business and noted initial successes and challenges in implementation [96][100] Question: Exposure to China and potential tariff impacts - Management clarified that only about 5% of revenue comes from China, and tariffs are not expected to have a major impact [105] Question: Demand in the purification business amid IV shortages - Management reported no falloff in demand for dialysis filtration and indicated capacity constraints could be addressed [107]

| --- | --- | --- | |---------------------------------------------------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | © Solventum 2024. All rights reserved. Q3 FY24 earnings presentation November 7, 2024 | | | Forward-looking statements and use of document Forward-looking statements This presentation contains forward-looking information about Solventum's financial results and estimates and business prospects that involve substantial risks and uncertainties. In parti ...

Table of Contents Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, Par Value $.01 Per Share SOLV New York Stock Exchange Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐ Common Stock, $0.01 par value per share 172,754,070 shares UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PU ...