The paragraph is an introduction to BD's Fourth Quarter and Full Year Fiscal 2024 Earnings Call. The operator informs that the call is being recorded for later replay and introduces Greg Rodetis, Senior Vice President, Treasurer, and Head of Investor Relations. Greg welcomes participants, noting that the call is available via audio webcast and mentions that BD has released its fourth-quarter and full-year fiscal 2024 results, accessible on their Investor Relations website. He introduces key speakers for the call: Tom Polen (CEO and President) and Chris DelOrefice (CFO), who will lead the call and be joined for the Q&A session by segment presidents Mike Garrison, Mike Feld, and Rick Byrd. Greg also highlights that forward-looking statements will be made, with comparisons on a year-over-year, FX-neutral basis, and reconciliations between GAAP and non-GAAP measures available in the earnings release appendices.

In this paragraph, Tom Polen discusses BD's leadership changes, welcoming Mike Feld as the President of the Life Science segment, highlighting Mike's expertise in Shingijutsu Kaizen and alignment with BD's culture. Polen reports BD's strong Q4 performance with 7.4% revenue growth, 120 basis points of margin expansion, and an 11.4% increase in adjusted diluted EPS. He acknowledges challenges in China and the Bioscience-Pharma markets but notes resilience in their MedTech and Diagnostics businesses with 5.9% growth. Polen expresses long-term confidence in the Bioscience-Pharma sector despite current challenges, citing consistent execution in margin expansion and exceeding fiscal year financial targets, including an adjusted EPS of $13.14 and a free cash flow of $3.1 billion, setting a positive tone for fiscal year 2025.

Over the past year, BD made significant progress on its three main priorities: driving sustained growth through innovation and commercial excellence, enhancing operational performance via BD Excellence, and effectively deploying capital. The company advanced several growth platforms aligning with major healthcare trends, such as AI and automation in connected care, the transition to new care settings, and medical technology for chronic disease treatment. In the BD Medical segment, the company achieved over $1 billion in annual biologic drug delivery sales, supported by its leadership in prefillable devices and increased production capacity. BD's pharmacy robotics platform has grown to become a major player in med tech, transforming pharmacies with promising growth potential. Additionally, the Alaris system had a successful first year back on the market, contributing to BD's connected medication management strategy.

In fiscal year 2024, BD is expanding its connected care solutions through the acquisition of advanced patient monitoring technologies, which is facilitating innovation in closed-loop monitoring and treatment. The integration is proceeding well, with commercial teams focusing on maximizing benefits for customers. BD Interventional made significant advancements in its urinary incontinence and tissue regeneration portfolios, including new product launches and platform expansions driven by trends in aging and weight loss. BD Life Sciences is innovating in flow cytometry with the new FACSDiscover S8 Sorter and AI-enhanced reagents. In Diagnostics, the BD COR platform and Onclarity HPV assay are seeing global traction, offering significant growth potential. Overall, BD's innovations are critical to healthcare procedures, with their products appearing in various advanced medical treatments and interventions.

In fiscal year 2024, the company experienced significant growth in its core devices sector due to increased market share and procedural volumes. Through the BD Excellence initiative, launched around 18 months ago, the company has simplified operations, improved quality, and enhanced margins by optimizing networks and increasing plant productivity. This progress resulted in margins, earnings per share, and cash flow exceeding expectations. The focus on generating cash has allowed for increased free cash flow, higher conversion rates, and the return of capital to shareholders via dividends and share buybacks. The company announced its 53rd consecutive year of dividend increases, maintaining its status as a Dividend Aristocrat. Future capital allocation will prioritize shareholder returns. Additionally, the company made strides in corporate responsibility by surpassing greenhouse gas emissions targets and advancing global health equity initiatives.

The paragraph highlights the company's recognition as a top corporate citizen and outlines its upcoming product launches and strategic priorities for fiscal year 2025. In BD Medical, the company plans to launch its next-generation Pyxis platform incorporating AI technology. The advanced patient monitoring sector will introduce the HemoSphere Alta Monitor and new smart sensors for comprehensive patient insights. BD Life Sciences will release the BD FACSDiscover Analyzer, and BD Interventional will enhance its PureWick platform with a portable device. The company plans to provide a detailed update at its Investor Day on February 26.

The paragraph outlines the financial and operational achievements of BD heading into fiscal year 2025. It highlights the company's strength in organic revenue growth, particularly in the BD Medical segment led by infusion systems and the BD Alaris product. The segment also benefited from growth in MDS consumables and hypodermic and vascular access portfolios, with notable performance in prefilled devices for biologic drugs despite some market challenges. Additionally, the acquisition of Edwards Critical Care added significant revenue. Overall, BD's execution of its BD Excellence programs led to exceeding margin, earnings, and cash flow goals for the year.

The paragraph discusses BD's strong growth across various segments. In specimen management, growth was spurred by increased demand and customer upgrades. The Diagnostics business faced tough comparisons but saw gains in molecular platforms like BD MAX and BD COR. BD Life Sciences experienced some offset due to lower demand for research instruments, while Clinical Solutions saw significant growth led by the FACSLyric cell analyzer and cancer reagents. BD Interventional exhibited strong organic growth, particularly in the PureWick franchise, with impressive results for the PureWick Male product. The Surgery segment also reported above-market growth, driven by the adoption of Phasix hernia resorbable scaffold and increased demand for ChloraPrep due to higher procedural volumes.

The paragraph highlights the financial performance of BDI, noting strong growth in peripheral vascular and kidney disease sectors, despite a decline in oncology. In Q4, the company achieved an adjusted diluted EPS growth of 11.4%, with significant improvements in gross and operating margins due to revenue leverage and efficiency programs like BD Excellence. For the full year, EPS grew by 7.6%, and operating margins expanded by 70 basis points, exceeding targets. BDI invested $1.1 billion in R&D to further innovation while optimizing cash flow, resulting in a 47% increase in free cash flow to $3.1 billion and an improved cash flow conversion rate of 82%.

The paragraph discusses strong financial performance driven by improvements in working capital, expense management, and productivity gains, which supported the acquisition of Advanced Patient Monitoring (APM) and returned $1.6 billion to shareholders. Cash and short-term investments totaled $2.2 billion by September 30, aided by previous debt refinancing. After the APM acquisition, net leverage was 3x, aligned with expectations, with a goal to reduce it to 2.5x in 12-18 months. Despite integration-related investments affecting cash flow conversion to around 75%, strong free cash flow is expected to support growth, debt repayment, and shareholder returns. The company plans to allocate $1 billion for share repurchases and aims to meet its deleveraging target while valuing BD’s intrinsic worth positively.

The fiscal year 2025 guidance forecasts high single-digit revenue growth, largely driven by contributions from a recently acquired APM business and a strong organic growth profile, despite challenges in China and Bioscience-Pharma. The company projects total revenues between $21.9 billion and $22.1 billion, with currency-neutral adjusted revenue growth of 8.8% to 9.3%. They expect to achieve about 10% adjusted EPS growth, driven by significant margin expansion through BD Excellence initiatives, despite increased acquisition-related interest expenses and a higher tax rate. Organic revenue growth of 4% to 4.5% is anticipated, with a projected mid-single-digit decline in China. The majority of the portfolio is expected to show mid-single-digit growth, aligning with a 5.5% growth profile. Margin expansion, particularly in adjusted operating margin, is expected to be primarily driven by improvements in gross margin, with some operational leverage in shipping and general administration, offset by increased investments in selling and R&D.

The paragraph outlines the company's financial expectations, indicating a yearly increase in interest and expenses due to an acquisition. The tax rate is projected to be between 14% and 15.5%, with potential quarterly fluctuations. The adjusted diluted EPS is forecasted to be $14.25 to $14.60, considering some foreign currency challenges. Revenue growth is expected to be lower in the first half of fiscal 2025, mainly due to decreased revenues from China and certain sectors, but higher in the second half. The company anticipates improved margins and operating income growth, with a 10% EPS growth at the midpoint of the annual guidance. The strategy focuses on balanced growth, with emphasis on market dynamics, margin expansion, R&D investment, and strong cash flow to create stakeholder value. The paragraph closes by opening the floor for a Q&A session.

The paragraph is a discussion during a conference call, where Vijay Kumar from Evercore ISI asks about the financial guidance related to headwinds in the pharma and biosciences segments in China. He observes that the company's expected growth in these segments seems conservative compared to their peers. Tom Polen responds, acknowledging the midyear adjustment due to market dynamics and noting that while their Q4 performance was strong, it slightly missed expectations. He emphasizes their overall annual growth: 5% for the company, driven by 5.9% in the med tech diagnostics business and 1% in the biopharma space. In Q4, they achieved 7.5% growth in med tech diagnostics and 1.3% in bioscience-pharma.

The paragraph discusses the company's performance in the bioscience-pharma and med tech diagnostic sectors, highlighting a positive outlook despite competitive market conditions. The company sees strong volume growth in China but anticipates a mid-single-digit decline in FY '25 due to value-based procurement impacting prices, although it remains optimistic about long-term prospects in the region. The bioscience-pharma sector saw an uptick in Q4, but the company is cautious in forecasting recovery, aligning expectations with FY '24. Overall, the firm is pleased with its current portfolio and strategic market position while maintaining a cautious approach in its future guidance.

The paragraph discusses BD's strong position in the pharma and biosciences sectors, highlighting their innovation and leadership in biologics despite current market dynamics. Although these sectors have been among the fastest-growing for BD in recent years, growth is expected to stabilize in the mid- to long term. The company is cautiously incorporating these dynamics into their financial guidance. Additionally, they are closely monitoring any potential impact from a hurricane on procedure volumes, but so far, no significant effect has been observed. BD remains focused on serving their customers and has noted a slight increase in the use of larger volume syringes as replacements. Chris DelOrefice adds that BD has adopted a prudent market position similar to its competitors and maintains a balanced financial outlook, with an anticipated 10% growth rate.

The paragraph discusses financial expectations and performance for a company, focusing initially on projected gross margins and revenue growth dynamics for the year. The company anticipates strong gross margins throughout the year, with a sequential increase. Revenue growth will be below the overall guidance in the first half of the year but above it in the second half, with a 48%/52% split between the first and second halves. It notes a lower growth rate expected in Q1, impacted by market dynamics and previous performance comparisons. The conversation shifts to a Q&A, where Larry Biegelsen from Wells Fargo asks about Alaris's performance, which met its fiscal 2024 goal of $350 million despite lower-than-expected Q4 sales. Tom Polen expresses satisfaction with Alaris's first full year of launches and its return to historical run rates as anticipated.

In this paragraph, the company discusses their positive outlook as they head into fiscal year 2025, citing a strong backlog of committed contracts. Mike Garrison expresses pride in their performance, noting that they exceeded $350 million. While there were challenges compared to last year's strong results in dispensing, Alaris performed well in the quarter. The company feels confident about returning to normal business operations and maintaining customer service and manufacturing capabilities. Tom Polen highlights successful remediation efforts and expects continued strong growth in Alaris for FY 2025. Travis Steed from Bank of America asks about the expectations for Q1 2025, questioning potential conservatism in the guidance despite strong performance from Alaris.

In the paragraph, Chris DelOrefice addresses concerns about the ability to accelerate revenue growth throughout the year despite tougher comparisons. He explains that the revenue profile is consistent with the usual pattern, noting that challenges last year, such as integrating respiratory products into their base business, created misleading growth rates. DelOrefice acknowledges headwinds in year-over-year growth due to mid-single-digit growth in two businesses the previous year. Despite this, he expresses confidence, emphasizing substantial earnings per share growth and anticipated margin improvements throughout the year. The segment concludes with the transition to a question from Robbie Marcus of JPMorgan.

In this paragraph, Tom Polen discusses the strong underlying growth of BD's core business, highlighting a growth rate of over 6% excluding COVID testing. Polen emphasizes the company's successful positioning in high-growth areas such as biologic drug delivery and life science research, which are currently experiencing some temporary market dynamics. Despite these challenges, BD projects a 5% growth for its overall market. Polen also notes the company's progress toward its BD 2025 goals, mentioning the development of multiple new growth platforms and levers, including significant advancements in biologics, GLP-1s, pharmacy automation, and advanced patient monitoring.

The paragraph discusses the company's successful tissue reconstruction and infection prevention efforts, particularly highlighting the PureWick platform as a significant business opportunity projected to reach $1 billion by 2030. The company is focused on advancing its portfolio in these areas and capitalizing on current opportunities. Patrick Wood from Morgan Stanley asks about potential impacts from tariffs and supply chain issues, to which Tom Polen responds by emphasizing the company's strong local manufacturing strategy, especially in China and the U.S., which helps mitigate tariff impacts. He notes that their network is designed to serve local markets and that they did not face significant impacts during past tariff dynamics.

The paragraph features a discussion between David Roman and Chris DelOrefice regarding the Profit and Loss (P&L) structure and expectations for FY '25 and beyond. Roman inquires about various financial factors including gross margin normalization, M&A contributions, tax headwinds, and interest expenses, as well as operating expense growth observed in Q4. DelOrefice responds expressing enthusiasm about the positive changes in the P&L, highlighting significant improvements in gross margins and operating margins achieved in FY '24. He emphasizes that the company's strategy is focused on enabling growth, particularly in sales and R&D, despite past market complexities and inflation. Looking forward, he states that FY '25 will demonstrate the benefits of this strategy, with plans to discuss it further in an upcoming Investor Day. The conversation ends with a transition to a new question from Matt Miksic.

The paragraph discusses BD's focus on AI technology and its integration into various products. Tom Polen highlights BD's longstanding involvement in AI, mentioning current products that use AI for tasks like automating microbiology and identifying bacterial growth in petri dishes. BD has partnered with Microsoft to analyze data across platforms for detecting narcotic diversion in healthcare and identifying at-risk clinicians. Additionally, BD's advanced patient monitoring business uses AI algorithms to predict potential hemodynamic changes. More details on these initiatives are expected to be showcased at BD's Investor Day on February 26.

The paragraph discusses the integration of AI with BD's infusion pump technology to create closed-loop systems that predict and adjust therapies to prevent issues in patient care. BD plans to launch a new AI-enabled platform, starting with the Pyxis series, that connects devices to a cloud-based system for improved outcomes and efficiencies. With around 3 million smart devices generating data, BD sees significant opportunities for innovation and better data utilization. They are investing more in R&D, creating an AI-focused incubator for product development, and applying AI in their operations for forecasting and optimizing performance. Further details will be shared at their Investor Day in February.

The paragraph discusses the integration of APM into BD, highlighting the positive cultural fit and efficient integration process. BD is excited about APM's potential for growth, projecting it as a 6% to 7% growth business. The focus is on maintaining customer service and innovation momentum. Some of APM's new product launches are mentioned, and overall, the integration is proceeding smoothly without disruption to business operations.

The paragraph discusses a healthcare company’s initiative to enhance medication management by integrating real-time hemodynamic monitoring with medication and fluid intake data. This integration aims to optimize patient stability and outcomes through the use of algorithms and informatics. This initiative was driven by customer demand and is backed by investments from gross margin expansion and research and development for 2025. The paragraph also touches on the company's recent announcement of a $1 billion share repurchase over the next 12 to 18 months, and a question is raised about whether this indicates a temporary shift from their strategy of acquiring smaller companies as they integrate their Automated Patient Monitoring (APM) business.

In the paragraph, Chris DelOrefice discusses the company's strong financial performance, highlighting a significant increase in free cash flow and strong margins. For Fiscal Year 2024, they exceeded their free cash flow conversion goal, achieving 82%. This financial strength provides flexibility for capital allocation. The company's capital allocation priorities remain focused on dividends, with a 9.5% increase, and on strategic acquisitions, primarily through tuck-in M&A. They are currently integrating a recent $4 billion acquisition and emphasize maintaining their net leverage target of 2.5x within 12 to 18 months. Additionally, they plan to repurchase about $1 billion in shares over the same period due to their strong cash flow position and belief in their intrinsic value. The company aims to remain disciplined and focused on continued cash flow growth.

Tom Polen, during the closing comments of a call, thanks the global team for their efforts in advancing the company's strategy, supporting customers, and improving patient lives. He expresses confidence in the company's position heading into fiscal year 2025, highlighting multiple growth drivers and the BD Excellence initiative driving margin expansion. Finally, he looks forward to the upcoming Q1 call in February and Investor Day, and thanks the participants for their support. The operator then concludes the webcast.

This summary was generated with AI and may contain some inaccuracies.