Baxter International Inc (NYSE:BAX) Q4 2019 Earnings Conference Call - Final Transcript

Mar 17, 2020 • 08:30 am ET


Baxter International Inc (NYSE:BAX) Q4 2019 Earnings Conference Call - Final Transcript


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Jose E. Almeida

statements for full year 2018 and 2017. We also filed our Form 10-Q for the quarter ended September 30, 2019. With these filings, we are now current with our SEC reporting obligations. Jay will discuss in further detail the changes we have made to strengthen and enhance our overall control environment.

Before I shift to a discussion of financial results for the fourth quarter of 2019, I feel it's important to make some comments on the rapidly evolving situation with COVID-19. The coronavirus outbreak continues to challenge communities, relief organizations, health care systems and businesses around the world. At Baxter, we have been active on the front line since its emergence, taking proactive measures to protect employees, aid patients and health care providers affected by the pandemic and maintain global supply of our essential medical products.

On the supply front, our manufacturing operations are currently running at planned levels, and our supply chain team is assessing and mitigating possible disruptions around the globe. We are proactively managing our inventory levels, stock levels in warehouses, transportation options and the availability of raw materials and component parts. Given the global nature of the epidemic, we have seen some constraints on a limited number of components and APIs, especially those sourced from China and Italy.

At this time, our team has been able to mitigate those disruptions by deploying existing inventory, providing additional support to our suppliers to help them return to production using alternate shipping methods to expedite delivery and working with additional suppliers where needed. Our own efforts over the last few years to strengthen and expand our manufacturing supply network further support our position.

We will continue to work closely with our regional and global supplier networks to address this ever evolving situation. And our goal remains to help ensure all of our customers have access to the products they need to the best of our ability. To that end, I'd like to acknowledge, the extraordinary actions of our 50,000 Baxter colleagues around the world, have been taken to serve patients and clinicians and help ensure access to our life saving and life sustaining products. While we will continue to actively monitor this situation and its potential business disruptions, we remain confident in our long-term underlying strength and innovation pipeline. We will also remain vigilant in exploring the most impactful ways to deploy our capital, including compelling business development opportunities as well as returning value directly to our investors.

With that, I will make some brief comments on our 2019 performance. As we shared in early January, our Q4 performance reflected Baxter's strongest operational sales growth since the 2015 Baxalta spin-off. Sales increased 7% on a reported basis, 8% at a constant currency and 9% on an operational basis. All six of our global business units and three geographic segments contributed to this strong top line performance, which was driven in part by our reinvigorated emphasis on innovation, advancing our new product pipeline will continue to be a fundamental element