Becton, Dickinson(US:BDX)2025-11-06 14:00Financial Data and Key Metrics Changes - Q4 revenue reached $5.9 billion, an increase of 7% and 3.9% organic growth, while full-year revenue was a record $21.8 billion, up 7.7% and 2.9% organic [4][5] - Adjusted diluted EPS for Q4 was $3.96, and for the full year, it was $14.40, representing a 9.6% growth, including a two-point impact from tariffs [5][18] - Adjusted gross margin for Q4 was 54.2%, and adjusted operating margin was 25.8%, with a 140 basis point impact from tariffs [17][18] Business Line Data and Key Metrics Changes - New BD segment showed strong organic growth of 4.9%, with double-digit growth in advanced patient monitoring and high single-digit growth in BD Interventional [4][6][7] - In pharma systems, biologics grew high single digits, driven by GLP-1s, while vaccine demand saw a decline [8][15] - Biosciences and diagnostic solutions returned to positive growth, with a significant recovery in BD BACTEC utilization [16][17] Market Data and Key Metrics Changes - Research funding in the biosciences business remained subdued, but sales in the U.S. and EMEA improved sequentially [6][16] - The China market is expected to decline in the mid-teens due to government policies, impacting growth by about 100 basis points [24][49] - Vaccines, which account for approximately 20% of pharma systems revenue, are expected to decline by about 25%, impacting growth by about 50 basis points [24] Company Strategy and Development Direction - The company is focused on accelerating its strategy as it transitions into new BD, emphasizing commercial excellence and innovation [9][10] - A two-year $200 million cost-out program has been initiated to address stranded corporate costs [12] - The company plans to enhance its capital allocation strategy, prioritizing internal investment, share repurchases, and a reliable dividend [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering mid-single digit revenue growth over the long term, despite transitory market dynamics [9][29] - The company is taking a prudent approach to guidance, incorporating updated views on the operating environment, particularly regarding vaccines and China [33][34] - Management highlighted the importance of BD Excellence in driving margin expansion and cash generation [20][63] Other Important Information - The company announced its 54th consecutive year of dividend increases and returned $2.2 billion to shareholders, including a $1 billion share buyback [5] - The Waters transaction is expected to unlock significant strategic and financial opportunities, with a projected close around the end of Q1 2026 [19][28] Q&A Session Summary Question: How does the guidance for new BD reflect conservatism? - Management emphasized a prudent approach to guidance, incorporating macro dynamics and not assuming improvements in the operating environment [32][33] Question: What are the expectations for Q1 compared to the full year? - Q1 guidance reflects full-year headwinds, with expectations for growth to step up in Q2 and Q3 [36][37] Question: Why not be more aggressive in returning capital to shareholders? - Management stated a focus on cash generation and disciplined capital allocation, with plans for significant share buybacks post-Waters transaction [40][41] Question: What is the expected impact of Alaris on fiscal 2026? - Alaris is expected to be a headwind of over 100 basis points in fiscal 2026, with a strong contribution in fiscal 2025 [56][58] Question: How will the company drive operating margin expansion? - Management highlighted the role of BD Excellence in driving gross margin improvement and operational efficiency [63][65]