Financial Data and Key Metrics Changes - In Q4 2025, worldwide sales reached $24.6 billion, a 7.1% increase despite a 650 basis point headwind from Stelara [20][21] - For the full year 2025, worldwide sales totaled $94.2 billion, reflecting a 5.3% increase, with U.S. growth at 6.9% and 3.4% outside the U.S. [21][22] - Net earnings for Q4 were $5.1 billion, with diluted earnings per share at $2.10, compared to $1.41 a year ago [21] - Full year 2025 adjusted net earnings were $26.2 billion, with adjusted diluted earnings per share at $10.79, an 8.1% increase from 2024 [23][31] Business Line Data and Key Metrics Changes - Innovative Medicine reported Q4 sales of $15.8 billion, a 7.9% increase, with significant contributions from oncology and immunology [24] - In oncology, Darzalex grew 24.1%, while Carvykti achieved sales of $555 million with 63.2% growth [24][25] - Tremfya in immunology saw remarkable growth of 65.4%, with full year sales exceeding $5 billion for the first time [14][25] - MedTech sales reached $8.8 billion in Q4, a 5.8% increase, driven by strong performance in cardiovascular and surgical segments [26][27] Market Data and Key Metrics Changes - In oncology, operational sales grew 21% in 2025, with expectations to exceed $50 billion in annual sales by 2030 [10] - The cardiovascular segment delivered 15% operational sales growth, with Abiomed and Shockwave showing strong performance [16][26] - Vision care saw robust growth, particularly in Surgical Vision, with a 10.8% increase driven by new product innovations [27] Company Strategy and Development Direction - The company plans to separate its Orthopaedics business to focus on high-growth areas [7] - Investments of over $32 billion in R&D and M&A in 2025, including acquisitions of Intra-Cellular Therapies and Halda Therapeutics, are aimed at accelerating growth [8] - The company aims for double-digit growth by the end of the decade, supported by a diverse portfolio of 28 products generating over $1 billion annually [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving faster growth in 2026 compared to 2025, driven by a strong pipeline and portfolio [8][19] - The company anticipates operational sales growth of 5.7%-6.7% for 2026, with a midpoint of $100 billion [35] - Management highlighted the importance of innovation in driving future growth and improving patient outcomes [43][55] Other Important Information - The company ended 2025 with approximately $20 billion in cash and marketable securities, generating $19.7 billion in free cash flow [34] - The effective tax rate for Q4 2025 was a benefit of 3%, compared to an 11.7% cost in Q4 2024 [30] Q&A Session Summary Question: Overview of growth potential and strategic repositioning - Analyst inquired about the key levers for achieving double-digit growth and the impact of the strategic repositioning away from lower growth segments [47] - Management responded that the strength of the portfolio and pipeline, particularly in oncology and immunology, supports the growth outlook [48][49] Question: MedTech market dynamics and growth expectations - Analyst asked about the MedTech market outlook for 2026 and the expected growth acceleration [58] - Management indicated confidence in growth despite potential policy changes, emphasizing strong clinical demand and strategic focus on higher growth markets [59][60] Question: Margin progression and relationship to top-line growth - Analyst sought clarification on margin progression in relation to expected top-line growth [68] - Management explained that margin improvements are expected to align with sales growth, particularly following the orthopedic separation [70][71] Question: Vision Care market health and performance - Analyst requested insights on the Vision Care market and performance discrepancies between regions [73] - Management highlighted strong underlying performance in the contact lens category and ongoing focus on vision as a growth area [74]

Financial Data and Key Metrics Changes - Organic sales growth was rounded up to 2%, with volume in line with the prior year, and pricing and mix each up 1% [4][8] - Core earnings per share (EPS) were $1.99, up 3% versus the prior year, with a currency-neutral basis also showing a 3% increase [8][9] - Core gross margin decreased by 50 basis points, while core operating margin remained equal to the prior year [9] Business Line Data and Key Metrics Changes - Skin and Personal Care led growth with high single-digit increases, while Hair Care, Grooming, Personal Health Care, Home Care, and Baby Care each grew low singles [4][5] - Oral Care and Feminine Care were in line with the prior year, while Fabric Care and Family Care were down low single digits [5] - The U.S. Fabric Care and Baby Care categories faced heightened competitive activity, impacting performance [40][41] Market Data and Key Metrics Changes - Organic sales in Greater China grew by 5%, with Pampers and SK II each growing double digits [7] - Latin America organic sales were up 7%, driven by strong growth across Mexico and Brazil [7] - Global aggregate market share decreased by 30 basis points, with 24 of the top 50 category country combinations holding or growing share [8][46] Company Strategy and Development Direction - The company is focusing on increased investment in its integrated growth strategy, emphasizing consumer-centric approaches [11][22] - Plans include driving superiority across all value tiers, retail channels, and consumer segments, with a strong innovation program [12][22] - The restructuring program aims to create a more agile organization, reducing up to 7,000 non-manufacturing roles to enhance efficiency [21][36] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging environment with heightened competitive activity in the U.S. and Europe, but remains confident in the strategy to drive market growth [10][22] - The company expects modest earnings growth over the balance of the year due to increased investments in innovation and competitiveness [25][26] - Guidance for fiscal 2026 includes organic sales growth of in line to plus 4%, with core EPS growth also in line to plus 4% [23][24] Other Important Information - The company returned $3.8 billion to shareholders this quarter, including $2.55 billion in dividends and $1.25 billion in share repurchases [9] - Adjusted free cash flow productivity was reported at 102%, indicating strong performance in cash generation [9] Q&A Session Summary Question: How is the restructuring being received internally? - Management indicated that the organization is adapting well to the restructuring, with clear plans in place for role reductions and organizational changes [33][34] Question: What is the competitive landscape in North America for Fabric Care and Baby Care? - Management acknowledged heightened competition in these categories, leading to increased promotional activity, but emphasized the importance of innovation and integrated superiority as the path forward [40][41] Question: What are the dynamics affecting global market share? - Management noted that while global market share is down 30 basis points, there are positive trends in absolute share in the U.S., with plans in place to drive growth [46][51] Question: What is the outlook for China and the changes made there? - Management expressed confidence in the progress made in China, highlighting strong growth in several categories due to effective interventions and innovation [60][64] Question: How is the company addressing consumer value and affordability? - Management clarified that value, defined as price over integrated performance, is central to their strategy, with continued innovation across all value tiers [68][70]

Financial Data and Key Metrics Changes - Organic sales for fiscal year 2025 grew by 2%, with volume growth contributing 1% and price mix adding another 1% [11] - Core earnings per share (EPS) reached $6.83, up 4% year-over-year [14] - Core gross margin declined by 40 basis points, while core operating margin increased by 50 basis points [14] - Adjusted free cash flow productivity was 87%, with $16 billion returned to shareholders, including $10 billion in dividends and $6.5 billion in share repurchases [15] Business Line Data and Key Metrics Changes - Nine out of ten product categories experienced organic sales growth, with Family Care and Personal Healthcare growing in the low single digits [11] - Baby Care saw a decline in organic sales in the low singles [11] - E-commerce sales increased by 12%, now representing 19% of total company sales [12] Market Data and Key Metrics Changes - Focus markets grew organic sales by 2%, with North America up 2% and Europe focus markets up 3% [12] - Greater China organic sales were down 5% year-over-year but improved sequentially, growing 2% in the most recent quarter [12] - Enterprise markets grew by 2%, led by Latin America with 4% organic sales growth [12] Company Strategy and Development Direction - The company is focused on an integrated growth strategy that emphasizes balanced top and bottom line growth and value creation [7][25] - A restructuring program was announced to strengthen execution and improve organizational capabilities [39] - The company aims to capture significant growth opportunities in North America, Europe, and enterprise markets, with potential sales opportunities ranging from $5 billion to $15 billion [24][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment, including tariffs, inflation, and geopolitical dynamics, which have impacted category growth [23] - The company expects the market environment to remain volatile and challenging in fiscal year 2026, with guidance for organic sales growth in the range of flat to 4% [45][46] - Management emphasized the importance of creating "tailwinds" through innovation and strategic investments to drive growth [58] Other Important Information - The company plans to reduce up to 7,000 non-manufacturing roles, or roughly 15% of its current non-manufacturing workforce, as part of the restructuring efforts [42] - The transition of leadership from Jon Moeller to Shailesh Jujurukar is planned for January 1, 2026, with a focus on continuity and strategic execution [5][56] Q&A Session Summary Question: Insights on Shailesh's leadership and tailwind creation efforts - Management highlighted Shailesh's extensive experience and leadership capabilities as key to driving future growth and value creation [56][58] Question: Addressing the narrowing performance gap in North America - Management acknowledged the reduction in category growth rates and the need to regain superiority in certain categories to widen the performance gap [65][66] Question: Timing and impact of restructuring on organizational capabilities - Management explained that the restructuring aims to enhance decision-making and efficiency, leveraging technology to break down silos within the organization [81][84]

Financial Data and Key Metrics Changes - In Q2 2025, worldwide sales reached $23.7 billion, reflecting a 4.6% increase despite a headwind from Stellara [24][25] - Net earnings for the quarter were $5.5 billion, with diluted earnings per share of $2.29, up from $1.93 a year ago [25][26] - Adjusted net earnings were $6.7 billion, with adjusted diluted earnings per share of $2.77, representing a decrease of 2.1% [26][34] Business Line Data and Key Metrics Changes - Innovative Medicine reported worldwide sales of $15.2 billion, increasing by 3.8% despite a headwind from Stellara [26][27] - MedTech achieved worldwide sales of $8.5 billion, reflecting a 6.1% increase, driven by strong performance in cardiovascular, surgery, and vision [30][31] - In oncology, DARZALEX grew by 21.5%, while CARVICTI saw over 100% growth [27][28] Market Data and Key Metrics Changes - U.S. sales growth was 7.6%, while international sales experienced a decline of 1.6% due to Stellara biosimilars and COVID-19 vaccine impacts [26][27] - The cardiovascular segment in MedTech delivered over 22% operational sales growth, driven by new product performance [18][30] Company Strategy and Development Direction - The company aims to become the number one oncology company by 2030, targeting over $50 billion in sales [11][72] - Focus areas include oncology, immunology, neuroscience, cardiovascular, surgery, and vision, with a commitment to innovation and addressing unmet medical needs [10][21] - The company plans to launch several new products and therapies in the second half of 2025, including TAR200 for bladder cancer and subcutaneous Ribrovant for lung cancer [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving and potentially exceeding growth targets for 2025, driven by strong performance in both Innovative Medicine and MedTech [39][42] - The company anticipates an acceleration in operational sales growth in the second half of the year, supported by new product launches and market share gains [42][60] - Management highlighted the importance of navigating external challenges while maintaining financial commitments and delivering shareholder value [51][52] Other Important Information - The company raised its full-year sales guidance by $2 billion and EPS guidance by $0.25, reflecting strong Q2 performance [9][42] - The effective tax rate for the quarter was 14.7%, down from 18.5% in the previous year [35][36] - The company ended Q2 with $19 billion in cash and marketable securities and $51 billion in debt, resulting in a net debt position of $32 billion [40] Q&A Session Summary Question: Drivers of upside to guidance for the year - Management indicated that both Innovative Medicine and MedTech contributed to strong performance, with notable growth in brands like DARZALEX and CARVICTI [54][55] Question: Oncology target of $50 billion by the end of the decade - Management expressed confidence in achieving the target, citing strong growth in multiple myeloma and the potential of TAR200 for bladder cancer [70][72] Question: Guidance for top-line growth acceleration - Management expects 2026 to show better growth rates than 2025, driven by new product introductions and market dynamics [84][86]