Becton, Dickinson(BDX) - 2025 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - The new BD reported approximately 4% growth in Q3, with expectations for mid-single-digit growth for the full year [10][11] - The company achieved 9.5% EPS growth at the midpoint, despite macroeconomic challenges [7][12] - Total return to shareholders for the year is projected to be about $2.2 billion, including $1 billion from share buybacks and $1 billion from dividends [9] Business Line Data and Key Metrics Changes - BD Alaris is gaining market share and has a strong commercial execution post-return to market, with a commitment to upgrade the entire fleet within three years [4][5] - The APM business showed a strong 13% growth in Q3, and this growth will become organic moving forward [27][29] - BD Interventional experienced double-digit growth, contributing to overall strong performance across the portfolio [26] Market Data and Key Metrics Changes - The company anticipates a decline in the China market by high single digits this year, with expectations for stabilization post-2026 [33][34] - BD Biosciences is expected to see sequential growth improvements, driven by recovery in research spending [31][32] - Pharma systems are projected to recover in the back half of fiscal 2026, following a period of destocking [32] Company Strategy and Development Direction - The primary focus for the next 12 months includes completing the separation from Waters Corporation and executing a commercial strategy [6][8] - The company is committed to a capital allocation strategy that prioritizes share buybacks, with at least half of the $4 billion cash from the separation allocated to this purpose [8][9] - The new BD is positioned in attractive markets, including biologic drug delivery and AI solutions, supporting a mid-single-digit growth profile [10][69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges, emphasizing the importance of scale and productivity improvements for customers [64][65] - The company is taking a prudent approach to guidance for fiscal 2026, acknowledging the dynamic macro environment while maintaining a long-term growth outlook [50][51] - Management highlighted the importance of innovation and customer engagement in driving future growth, particularly with new product launches like Pyxis Pro [38][46] Other Important Information - The company has completed a $1 billion share buyback for the year, contributing to a total capital return of $2.2 billion to shareholders [9] - The introduction of AI-enabled platforms like Pyxis Pro is expected to enhance operational efficiency and customer satisfaction [39][41] Q&A Session Summary Question: What are the growth expectations for the new BD? - The new BD is expected to grow at a mid-single-digit rate, supported by a strong innovation pipeline and market positioning [10][11] Question: How does the company plan to allocate capital post-separation? - The company plans to allocate at least 50% of the $4 billion cash from the separation to share buybacks, with a focus on maximizing shareholder value [8][9] Question: What is the outlook for the China market? - The company expects a decline in the China market by high single digits this year, with stabilization anticipated after 2026 [33][34] Question: How is the company addressing macroeconomic challenges? - Management emphasized the importance of scale and productivity improvements, as well as strategic partnerships with customers to navigate the changing environment [64][65]