Good morning, everyone, and welcome to Baxter's 2022 investor conference. My name is Clare Trachtman, and I'm the Vice President of Investor Relations for Baxter. We are very excited to be here with you today to share Baxter's story for creating compelling value for all our stakeholders and how that translates into our new financial outlook. Before we begin the presentation today, I would like to remind everyone that some of the statements being discussed today contain forward-looking matters regarding future events. We wish to caution you that some such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and that actual results or events may differ materially. Please refer to the forward-looking statements contained within the presentation materials available on our website for more details concerning factors that could cause our actual results or events to differ materially. These materials also contain reconciliations for non-GAAP measures being used as part of today's presentations. As part of today's presentations, you will hear from members of Baxter's executive leadership team regarding the next phase of Baxter's transformation journey. This includes strategies to continue creating compelling value for patients, clinicians, and investors through leading edge innovation, market development, operational efficiency, and other vital growth factors. José E. Almeida, Baxter's Chairman and CEO, will kick off the presentations today, followed by Jay Saccaro, Baxter's Chief Financial Officer, and then James Borzi, Baxter's Chief Supply Chain Officer. Following those three presentations, we will host a brief Q&A session. The next group of presentations will begin with Giuseppe Accogli, Baxter's Chief Operating Officer. Following him will be presentations by all of our global business unit presidents. After the completion of these presentations, we will host another Q&A session with all of the GBU presidents. For those of you that are listening to this via the webcast, we do have the ability to submit questions via our webcast portal. Please note we will first take questions in the room before addressing the online questions. For any of those questions that we aren't able to answer today, I will follow up within the coming days. In addition, we encourage you to visit our innovation hall during the breaks and after the completion of the formal presentation. For those of you that are on the webcast, there is a link to a video of the innovation hall available on our website. With that, I will now turn it over to Baxter's CEO, José E. Almeida, to discuss the company's strategy to transform healthcare and create value for all of our stakeholders. Jos é. Good morning. Is my mic working? Perfect. Good morning, everyone, and welcome to the Chicagoland. For you at home or at your offices, I hope that you're gonna enjoy our meeting today. Listen, we haven't been here for about four years. The last time we did was almost four years ago, to the date, and was in New York City. Now it looks like it was yesterday, but COVID went through and is still going through. I think we got the right window to have everybody together. We have an event that is safe and good for everyone. We're very excited about being here today. We're gonna give you an insight and a window into what Baxter is doing and what is being delivered. We'll be delivering in the future. As you know, Baxter is a company that is almost 100 years old. They had evolved through many different phases and transformations, and we're looking forward to get to the next phase. At Baxter, what we do is essential to healthcare. Our brand is extremely recognized and is associated with the safety and quality of our products. Everything we do at Baxter is with ethics and compliance, is what we call our One Baxter force multiplier. That is something that we tell our employees quite often and consistently, is about our ability to do business is only valid when we do it ethically and compliant to the laws and regulations and our own policies. If you think about what is a company, we have 60,000 employees. It's all about the culture and the talent that we have, 'cause everything else is just a result of it. We are very focused in four cultural levers that are driving the company since I joined the company as a CEO in January of 2016, which is a sense of urgency. Get to it. It doesn't mean you're gonna do faster, but you're gonna have the sense of urgency to do it right, but do it at the right time. Also, the sense of collaboration, simplification, which is so important, a company that has so many years of history. We wanna make sure that the bureaucracy is simplified and we have the ability to deliver on every operational excellence lever that we have. Also, the most important is the courage of our employees to stand up and be themselves and express themselves. This drives to the diversity, equity, and inclusion. Because the inclusion is one of the things that I always say is the enabler for diversity. If you have a diverse workforce, they will be there with you for as long as you can give them the inclusion sense, though they belong to the company without thinking that they need all to act the same. If you think about bringing themselves to Baxter, our company is very much into the inclusion part, which is the retention of employees within Baxter. We do this in a manner that is all encompassing in all regions of the world that we do business. If we think about what were the phases of transformation of Baxter, how did we get here? It is worthwhile looking backwards for a minute and think about how do we transform or how did we transform Baxter to a Baxter of today. We started in 2016- 2017 looking at primarily the strength of the financial operations of the company. We went after free cash flow. We went after expenses. We went after cost reductions. We started to put the foundation in the most important thing of patient safety and quality that became our number one tenet in the company. We can speak later about our tenets, but the first one that we put in place was patient safety and quality. We strengthened our financial position. We invest in our operations and also created a base for innovation. If you think about that phase of transformation set us up for the phase II of 2018 and 2021, which was to actually execute on innovation. Today, we launched 20 just the Baxter legacy of products, 22 new products a year. If you think about our operations that created our device design group within the company was created here in Northern Illinois. We have almost 600 employees in Bangalore, India, software, testing, cybersecurity. We had to create the ecosystem so important to develop new products. Our medical affairs, our clinical trials, our regulatory affairs, all these had to be put together. The company was very focused on pharmaceutical, but prior to 2016, very few products were launched on the market. As a matter of fact, in 2015, just one product was launched by Baxter, versus today, we have a cadence of new products, and you're gonna be able to see that. That was the 2018- 2021, closing it with a commitment to our social responsibility. I hope you had an opportunity to read the 2020 report that came out in July, August of 2020. We have an update coming out this year. The results of this transformation were clearly evident in our financials from the reported sales growth of 4%+ in CAGR. You think about our market growth rate, this is above 50 basis points-100 basis points higher than that. Our operating margin also went from 10% to almost 19%. Our EPS, 22% CAGR, and our free cash flow, which was one of the tenets of the company to be able to transform its portfolio, was to bring from $300 million- $1.6 billion, which gave us the ability to move to the next phase of the company, if you think about. You know, the next phase was how do we transform the portfolio? Because if you don't have the right financial structure, if you don't have patient safety and quality, we used to have five warning letters-six warning letters that we have, Jackie Kunzler here and her team and working with James Borzi in integrated supply chain, who really did a lot of work to get the company to a place where today we still have a pending warning letter in a matter that came with the acquisition of the company, but the legacy Baxter warning letters were all addressed. This was a big deal for us. To be able to move to the next phase of portfolio management, you had to get all together done. You think about how do we unlock the innovation going forward, we need to expand into adjacencies. How do you create the ability to grow above market is with innovation, is with the talent and the culture of the company, and the integration of the products and the next phase of connected care in critical therapies that we're developing. You think about how do you get there, and that was when we decide to bring Hillrom into Baxter. That acquisition was extremely important to Baxter. We closed in December, and it has become the tenet of the vector that's pushing the company forward in creating the innovation opportunities to expand the markets that we're in. When we acquired Hillrom, we had altogether about 10 business units. We're now down to about eight business units. We're gonna report those that we're reporting, segments, and that created our new Baxter. The new Baxter welcome 10,000-12,000 employees at Hillrom to make it a strong 60,000 people company. When we start looking at this and said, our mission is so strong, it's one of the things that I did not change in Baxter. I spent a lot of time reflecting what should be the mission of the company. The mission of the company was well established for many, many decades, and that is save and sustain lives. If you ask any employee of ours from operations, from our manufacturing, distribution to research and development to the back office of the company, it's very clear what is important to us, is save and sustain lives. With the pivoting of the company into more connected care, understanding where the markets are going, we had to restate our vision. Our vision now says that we're gonna transform healthcare with a customer focus in improving patient outcomes and enhancing the workflow efficiency. That's very important because you're gonna see throughout the presentation today how do we create the future by not only connecting devices, but also creating intelligence behind them, enabling cost-effective care. The cost-effective care is two very specific vectors. The first one is the ability to provide effective clinical outcomes. The second is at a cost effectiveness. That combination becomes more and more important as we go forward and pivot the company in a new direction. When you bring both companies together, what you have, we touch 350 million lives a year. That is impressive and incredible number of people that we touch and with intent of making them better after they are treated one of. with one of our therapies. We work and deliver care and products in over 100 countries, with sales close to $16 billion in eight business units. In all the regions of the world. It is an impressive global company with 60,000 committed employees under one very specific and strong mission to save and sustain lives. Another area that we actually had broadened is our sites of care. If you think about Baxter was very strong, always in the acute care market and in the home care with peritoneal dialysis in our parenteral nutrition therapies to some extent. We now become more present with other business such as PSS, GSS and Front Line Care, which are the legacy Hillrom businesses. Also to the right, you have the alternate site care markets that now are creating further opportunities for the company. Once we went through the COVID-19, we found that a significant amount of care has moved away from the hospital. We know, for instance, that Medically Home, a company that we co-invested with two very large providers, is driving the change of site of care with those two very large providers will give force to this, not trend, but certainly a for sure change that will occur in the next five years to a decade. You're gonna see a lot of those changes, and Baxter wants to be present. To be present there, you've got to have products and innovation that create that opportunity for us to be a participant in those markets. When we think about how to set the strategy of the company, first thing we do is to look at the trends that are currently in front of us. If you think about the number of more complex disorders, the digital health transformation post COVID-19. I'm not saying that COVID-19 or COVID per se is gone, but that transformation took place. When people think about, well, we compare to 2019, it is okay to compare to 2019 volumes. It's okay to do that, but the circumstances of how care is delivered today is very different. That era of 2019, 2018, how care was delivered is pretty much behind us. We've got to look forward and look at the factors that will be driving better health care and better access. The outcomes and how things are reimbursed are changing significantly as well. A shift from hospital, as I said, to a lower cost settings and the ability to access health care in many different countries. You know, access to health care is not equal across the globe, and Baxter is driving to create products and technologies that are more accessible in many more countries in the world so people can get treated more effectively. One significant change that we never spoke about in the past was integrated supply chain. How the supply chain plays a role, because we always look at supply chain to deliver first patient safety and quality, and then cost effectiveness in making the products and be able to get the right product at the right cost at the right time. To be able to do this today, things have probably most radically changed in this area than anything else. What we as executives grew up with was putting manufacturing locations to drive lower cost and tax effectively. That's what we did. You know, you see, many companies that I work for and including here at Baxter was putting factories in places that were actually very cost-effective and very tax effective. When you look at the trend going forward is you've got to put the plants where you sell the product, and you've got to buy the components where you have your plants. Because the supply chain, the cost of moving things around the world, and when things got really clogged up in ports, the next thing you do is put in the belly of an airplane, and that cost a lot of money. You end up eroding your profit to a point that you cannot make up in any cost reduction because the location of the plant. You're gonna hear from Jim Borzi today, how Baxter is moving very quickly to alleviate that kind of issue that we have. Those are the trends that are ahead of us. When you think about those trends and the influence from the outside and the world is telling us these signals and how do we react to it, is to put a strategy that's robust in place with four strategic pillars that you're gonna be hearing throughout the day today. How we're gonna address in every single business of ours, is starting with innovation. Those two principal vectors here are the connected care and the core therapies. Market expansion, our ability to go geographically to different places, use the Baxter network with Hillrom to create expansion and growth of the market and market development as well. We have new things that we're doing, bringing Hillrom into it will give us a really good leverage on synergies going forward. We've gotta make sure that that is put in place. Something that we do is understand how capital allocation really will drive growth in the future. The first thing that we think about capital allocation, and this is in every meeting, if you could be at a meeting at Baxter, you would see that patient safety and quality takes number one priority when we allocate capital within the company. We'll put every money that is needed in that area. We will remediate plants that need remediation. We're gonna continue to improve assets that we have, continue to invest money for facilities where we are single source or double sourcing to a market. We will fulfill our responsibility and obligation as a market leader in healthcare. Patient safety and quality is our number one priority. Then we take the rest of the money, and we're gonna put that to work in many different forms, allocating internally to business that are growing faster, business that can provide for the future, also return shareholder money to shareholders via dividends, as well, when appropriate, share buyback. I wanna caveat that saying that M&A is our preferred way to deploy cash once we restart repaying our debt, and share buyback will be an alternative to that if we have not encountered a good M&A target. We have done this in the past until recently when we found that Hillrom and Baxter will make a powerful combination. If you think about these strategies derived from our market dynamics, how does that affect our market growth and what markets are we in? What we're finding is the acquisition of Hillrom upticked slightly our weighted average market growth rate. Today, we have a sustainable market growth from 3%- 4%. If you think about the opportunities and the CAGR of growth of our businesses are disproportionately allocated to the Hillrom businesses that came into Baxter because the markets are shifting into more a connected health bed than solely capital products, but also you have some really good, strong business of Baxter coming in. In a total market of $130 billion, we have a WAMGR of 3%-4% in each, you know, in our businesses today. You're gonna see from our executives today that we have in every single case, Baxter growth rather, Baxter growth is above or at market growth in every single category. But how are we gonna do this? How are we gonna pivot the company? What you're gonna see today is a very remarkable shift from 2018 when you were in New York. You see that we are using two very powerful vectors. First one is connected care and then core therapies. The connected care is not just a jargon. It's an enablement for better insights. You think about how we're gonna create smart devices, and I hope you had an opportunity to see in our display yesterday or this morning, how we're planning to connect devices. Smart devices and then the ability to communicate and integrate with hospital systems and integrate amongst themselves to be able to do what? To create insights. 'Cause at the end of the day, there is advantage of connecting devices and put them to work and moving data around. But at the ultimate goal, the aspiration is actually to create intelligence behind them with algorithms that help clinicians in such a tough market in terms of human resources. The resources in hospitals are difficult to come by. They're expensive. Nursing is expensive. Technicians are expensive to hospitals. If you've been to a hospital lately, you'll see that that there's significant load, overload of nursing staff. What you do, you've gotta create the pathway, the opportunities for them to do their jobs in more effective way, and that is to actually create insights more so than just connecting devices. You're gonna see throughout the day today a phenomenal lineup of new products from our presidents and how we're gonna execute through our current initiatives, primarily with revenue synergies that are coming about, geographic expansion, channel expansion, and market development. All those four driving tenets will create $300 million incremental sales through market expansion efforts by 2025. Just another box in our four strategy pillars. Also, you're gonna hear from James about $1 billion in anticipated growth savings by 2025. They're coming from G&A efficiencies, the synergies from Hillrom, digital transformation, and integrated supply chain. You're gonna see that the company has committed and shifted very rapidly into digital transformation of its own operations. Independent of being a connected health company that is driving that, the new products to adapt to the market conditions, we ourselves have changed quite a bit how we operate our company. We're gonna deliver on not only the anticipated and discussed synergies of Hillrom. Jay is gonna cover how we're gonna deliver that and a bit more. It's all about getting it together and the capital allocation is key. As I said before, patient safety and quality takes number one priority. Also, how we put money in business units. You're gonna see an uptick in R&D expenses today. Why? Because we're allocating more money to business that are growing faster. We also are gonna be repaying our debt as we promised, and be able to continue to increase dividends yearly. As you just noticed, we had a modest increase in dividends. We're gonna continue to increase, and when we feel that the debt repayment had reached the point that we want, we're gonna accelerate that growth of dividends. The share repurchase, as I said, I prefer M&A than share repurchase, but if we don't find the right targets, we're not gonna let money accumulate in the balance sheet, we're gonna return it to you. When we think about M&A, is very important to delineate that our markets have expanded quite a bit with the acquisition of Hillrom, creating opportunity for adjacencies that were not here before. Just few of them that will be very thematic going forward as we continue to repay the debt, we're gonna get into M&A again, and that is cardiology is one of them. Decision support systems, point of care diagnostics, things that will be bolt-on and into adjacencies that continue to expand our market with what objective? The objective of increasing our weighted average market growth rate. Become more participant in more attractive markets that drive growth for the company through its markets. Is our commitment in how we're gonna deploy our cash. One thing that has become extremely important to the markets, but has been in Baxter for many years, is our commitment to social responsibility. As I said, if you had an opportunity to read our 2020 report, please look at our report coming out this year, probably July or August timeframe, we will be able to give you a snapshot of progress. We have very specific programs to support and protect our planet, our patients, and our people and communities, and our commitment to carbon neutrality, carbon footprint neutrality, our commitment to clean water, our commitment to being environmentally not only conscious, but environmentally protective of what we do, and making sure that the communities that we work in are protected. Empowering our patients to understand best therapies and also to improve our capabilities and quality of our products. In championing our people, in creating an environment when people wanna come to work for Baxter, but also support the communities with, for example, $275 million in underserved communities grants to create the base that will make Baxter a better company in the future, and be socially responsible that together we can have a better place for all of us. We are recognized as a top employer, as in, for many different publications. Recently, we just got a 3BL Media 100 Best Corporate Citizens, Disability Equality Index, Dow Jones Sustainability Index. We've been in that index for many years. Corporate Equality Index, 100% score on Human Rights Campaign, LGBTQ+ inclusion index. The company has. This is just a few examples of how we're recognized as a good corporate citizen. All of this together, these strategies, driving our behaviors, driving how we deal with our culture, and how we retain our talent, will create a long-term value for our shareholders. You start with innovation and operational efficiency, as I said to you, the two out of four strategic pillars, will deliver in 2022-2025 a WAMGR of about 3%-4%. With our deployment of capital, our innovation into adjacencies, we aspire to be a 5%+ beyond 2026. I, as I close, I want you to be clear about what are the top priorities of Baxter. These are not only for our investors, this is spoken to our employees every quarter. It's all about the ability to produce products that deliver patient safety and the quality of the products. We do that every single minute of the day throughout our 60+ facilities across the globe, and is embedded in our culture. We're gonna grow through innovation. Like I said to you, we're increasing our spend in innovation. We wanna have best place to work. Want people, when they get up in the morning, they have to go to work, or go to their home offices, or go to our office, to our plants, distribution centers, R&D labs, that they feel this company is socially responsible, that is an inclusive company that values diversity and equity, and has all the ingredients to make this a place that I wanna go to work. If we do those things right, we fulfill our mission with ethics and compliance and our culture levers, we will deliver on the results of the company. The results are consequence. They don't drive the first thing that we do. They are, as a consequence of a good company with 60,000 great employees, they wake up every day with one mission, save and sustain lives. We are excited about the future. You're gonna see today through our executives speaking, we have advanced very quickly the integration of Hillrom. We're delivering new products. Primarily connected care in new therapies. We're also creating expansion of the markets that we currently serve in operation efficiency more than ever is so important to the company. Think about capital allocation as a very strong lever the company has to continue to grow into adjacencies. You're gonna see a group of people today that I consider being a veteran in the industry. One of the best, if not the best I worked with. Starting with Jay Saccaro, who gonna follow me. James Borzi, who joined us about almost two years ago. Giuseppe Accogli, our COO. Reaz Rasul, who's been in Baxter for five years and moved from acute renal care into medication delivery with acute renal care, and today is the President of Frontline Care that came with Hillrom. Amy Dodrill, who is leading our two business units, GSS and PSS. Hillrom came with the acquisition. George Vasserot, who is today acting president for Pharmaceuticals. Lee Ann Schuette, who has been with us for a while, worked closely with Reaz. Today is the president of our renal business. Heather Knight, who worked with me for many years before at Baxter, and she is the medication delivery, acute renal and nutrition president as well. She runs most of the U.S. business with Canada and Latin America. You, you'll be in great hands today. Now I'd like to welcome our CFO, Jay Saccaro. All right. Welcome. It's so nice to see everybody in person. It's my pleasure to be here with all of you. It's so nice to be in Glenview, Illinois, which is a place of real historic significance to our company. Baxter was founded in Glenview, Illinois. The first plant was here on the corner of Waukegan and Glenview. We made IV solutions in glass bottles. Incidentally, in 1941, Baxter's revenues were $1 million. We've come a long, long way. I think as we think about the next chapter and what we're so excited to build and how we are so excited to take this mission of this company for the next 90 years, it's exciting to be back here in Glenview. For those in the audience, we have an innovation room where we're displaying all of the technology of this great company. What I hope jumps out at you is the coherency, how these products work so well together. I know that Don Baxter would be very excited to see a room like this with the legacy of this great company intact and in fact flourishing. Let's summarize all of today and what I'm gonna share with you. For me, this is all about a set of financial projections I'll share, which are very solid. Solid sales growth, accelerated operating income growth, and even faster free cash flow growth. All of that built on durable end markets. All of that built on our commitment to innovation and game-winning strategies. That's what today is all about. What happens as a result of that is a really interesting thing. Jos é talked a little bit about this idea of capital deployment. As we move through this plan, we have tremendous opportunities for capital deployment as we build the balance sheet of this company up based on the solid financial performance that I'm going to talk to you about. Before we get to that, let's just highlight a few things. I think that there are three components that I would share that are highly relevant. Number one, this is all about innovation. We're gonna add over $800 million in incremental products, and so much of it is based on connected care. The idea of we take a product, link it with technology, link it with intelligence, and solve outcomes in a unique and differentiated way for our customers. We have that with the durable end market supporting revenues. We're gonna get back to what we know how to do so well, which is cost transformation, and operating efficiencies and P&L improvements. What you can see in this middle box is we're expecting to target $1 billion in gross savings by 2025. That's a big number. I can tell you, we're gonna use the same methodology that we used to deliver $1.2 billion from 2015- 2020. I'm so excited to work with my colleague, James Borzi. We've already made great progress on this, but we have so much more to do. The savings are gonna come in two flavors. Some of it will be manufacturing related and supply chain related, and some of it will be related to synergies from the Hillrom standpoint. Finally, as I said, we've always been focused on capital allocation. We have high returns for the deals that we expect. We like to return capital to shareholders. I'll make some comments later in the presentation in terms of how we will continue this disciplined approach to capital allocation for the years to come. As always, I'm gonna share with you financial projections, but before I do, I wanted to share some ins and outs, what are we assuming and what are we not assuming. I think this actually has become a much more important page than in past years, given the highly volatile world that we are living in today. From an assumption standpoint, our outlook assumes constant foreign exchange rates. We do expect the price of oil to decline to roughly $70 by 2025. We expect that on a linear basis, we can talk more about what the implications of that are. The supply for electromechanical devices has been incredibly challenging over the last couple of years, and I think so much of our time as a management team is working with our suppliers to secure critical components. We expect that to moderate in the H2 of 2023 and be much more normal. Inflation, which has been unprecedented, begins to normalize in 2023. From a new product standpoint, that $800 million is a risk-adjusted number. As far as financial assumptions, we have share repurchases only to offset dilution. What that means, what that implies is there is a very substantial cash build that is attached to this long-range plan. As Clare mentioned, we're displaying adjusted financial results. We have the safe harbor statement available at the beginning of this presentation on our website. The comparable GAAP reconciliations are in the appendix of the presentation. Now, we understand the current situation with COVID. I feel like we've well modeled that. We're assuming no new, highly disruptive variant. We're familiar with the rolling lockdown situations. I believe that we've reflected this appropriately in our forecast for 2022, but we're not modeling in a new variant. We're not including any M&A in this presentation, no acquisitions, no divestitures. We've talked about doing both, and in fact, we expect to do both, but neither of those are included in these numbers for obvious reasons. We are also assuming a stable macro environment. You know, I think our company does pretty well despite lots of different conditions, for purposes of this, we've assumed a stable macro environment. Finally, there's been a lot of talk about tax reform in the U.S., global minimum tax. These are discussions that are ongoing. For the purposes of this presentation, we've assumed no major changes to tax laws. Here it is. In 2022, we expect roughly 3% sales growth. Because of massive supply chain challenges and escalating price of oil, we guided adjusted operating margin flat to the prior year with adjusted diluted EPS of $4.12-$4.20. That's this year. We shared that on our most recent earnings call. As we move forward, the story gets really exciting. 4%-5% compounded sales growth. We expect 350 basis points-400 basis points of adjusted operating margin expansion by 2025. There is a lot of work. The innovation growth, the work that Jim and I are doing, the work that Giuseppe, all of the work that we're doing on the cost profile of the business, the efficiency, all of that will feature in that operating margin expansion. Now, I will say it's not a linear progression. In 2023, there are some overhangs that continue to exist with respect to inflation, with respect to the supply of critical raw materials that we've assumed in our numbers. We anticipate a minimum of 75 basis points in a given year, totaling 350 basis points-400 basis points by 2025. From an EPS standpoint, low double-digit CAGR, and again, that does not include any capital deployment, and free cash flow conversion greater than 80% by 2025. Let's talk a little bit about the components of this. First, sales. Because we have these durable end markets. You know, I've talked a lot for years about durable end markets, and I think in no year was that more on display in 2020 when, despite a global pandemic, our business grew. That base business will deliver 230 basis points of growth. Roughly 1/2 the growth requirement comes from our base. From an innovation standpoint, all the exciting innovation that we've talked about will add 160 basis points of sales growth, with market expansion yielding another 60 basis points. We'll talk throughout the day about market expansion and how excited we are to take products from one geography and put them in another, to take products from one channel and put them in another. This idea of market expansion is a real opportunity for us and will feature in this 4%-5% compounded growth. Against this is all delivered against a weighted average market growth of roughly 3%-4%. We are outpacing our markets by 100 basis points at the midpoints. In every single category of Baxter, we are at or above the market growth rate, and our business leaders, my colleagues, will share with you why we are so strongly convicted that that will be the case in the coming years. I won't walk through these in detail, but I will point out two lines, PSS/GSS and Front Line Care. We're so thrilled to bring the Hillrom businesses into Baxter because it's so fundamentally related to what we're trying to do from a portfolio standpoint. Clearly, there are great benefits from an ecosystem, from a product tie-in standpoint, those are unassailable. What's interesting is, in those two simple cases, the WAMGR of these businesses is higher than Baxter's, and the growth rates of these businesses are also higher than Baxter. In both cases, they contribute in a very positive way to the Baxter economic profile. Against that solid top line, we get to work. James, most prominently in the manufacturing and supply chain area. We have fought through hundreds of millions of dollars headwinds, and we've done so while focusing on job number one, which is to save and sustain lives. I am so proud of the work that our supply chain team has gone to. I'm so proud of the lengths they have gone to serve our patients. We have been so focused on that. At the same time, though, we've done a lot of work in terms of enhancing the margin of the company and offsetting some of these impacts. What happens in this plan, as the inflationary environment stabilizes, as the availability of products stabilize, we get to put on full display all of this great work that James will talk to you about in these five areas, these value improvement programs we've undertaken. All of that will be on full display in conjunction with this idea of Hillrom synergies. I think, you know, for me, you never know what you're gonna get when you buy another public company. There's a limited amount of diligence that you can do. I am so excited about what Hillrom has brought to the table. I think for me, most prominently is the employees of the company are fabulous. To those in the audience, please check out the innovation hall where you get to meet some of the Hillrom employees. The products are outstanding, and the innovation connectedness with Baxter really unlocks a new set of opportunities for us as a company. All of those things are fabulous. In the meantime, from a financial outlook standpoint, we're doing better than we expected on the cost synergy side. We anticipated at deal close, $250 million in synergies. We'll do better than that. In 2024, we'll do $300 million, and that ramps to $350 million in 2025. Why is that? As we've come to understand the footprint, the real estate footprint, for example, there are more opportunities than we previously anticipated. We intend to put those in place and capitalize on those. All of this is managed using the same program methodology that we did with Baxter's original cost transformation, both the supply chain and the Hillrom cost synergies. In fact, James and I were in a meeting. My last meeting before we came to prepare for this session was with James and the team going through the supply chain set of initiatives that yields this $650 million gross improvement. Here's how it shakes out. 2022 guidance, you're all familiar with. We add 180 basis points due to operational growth. The ISC transformation adds 170 basis points. Now, the obvious question, if it's $650 million, how does that only translate to 170 basis points? We have continued inflation assumptions built into our numbers. The value capture programs in excess of the 2022 level will add 140 basis points. One of the most important boxes in this presentation, in my view, is this red box. For us, we will increase the level of R&D in the coming years. Historically, we've drawn down R&D a little bit as we focused on efficiencies, and there were a lot of opportunities there. We will escalate the amount of R&D investment as a percent of sales in our business. We'll target certain sales and marketing investments to really accelerate growth. This 115 basis points of reinvestment is more about setting the stage for what José shared with you, this idea of 5%+ WAMGRs in 2025. Because for us, I hope you can appreciate the story doesn't end in 2025, it goes far beyond. We will be able to create enormous value in that period beyond, solving problems for clinicians in ways that they don't even realize through some of these investments that my colleagues will talk to you about during their presentations. In summary, this yields 350 basis points-400 basis points of margin expansion. A large sum, but a sum that we're committed to and focused on delivering. I will say this, Jos é and I both. When I first met with Jos é in 2015, his question, one of his questions to me was, "Well, what about free cash flow?" We both agreed seven years ago, that's the most important metric around the health of a business, is sustained free cash flow generation. This plan reflects that commitment. We expect 80%+ conversion by 2025. We'll invest roughly 5%-6% in CapEx over the years, as a percent of sales, to do things like ensure the quality and supply of our product to support volume growth, all of those aspects. That's the level that we anticipate. We do expect this conversion to tick up to 80%. I will say that, you know, I haven't talked a lot about cash flow over the last couple of years. For me, cash flow optimization has taken a back seat to fulfilling the mission of the company, and we had to do that over the last couple years. We carried more inventory than we anticipated. Why? Because with uncertain demand patterns and with a very challenging supply chain situation, we had to carry extra inventory to ensure that we get product to our patients. The patient is always in the front seat, but never more so than in the last couple of years. Furthermore, versus optimization of days payable, our conversations with our suppliers was more about how do we get product from you, not payables terms. All of that changes and will start to change, and we're pleased to report the 76% expectation in 2022, but also will tick up above 80% by 2025. I believe that personally, that supports the long-term valuation of this great company. Portfolio management is something that we are incredibly focused on. We have a very disciplined approach to this. We reinvest in the business to enhance innovation. We're very focused on organic investments where we can support and deliver to our patients new and exciting therapies that are differentiated. We'll strategically execute on targeted acquisitions. The business development environment is very rich. Over the next year and a half, we are somewhat limited to more tuck-in style acquisitions, and over time, we can open up the aperture on broader business development. It's safe to say this will continue to be an important aspect of what we do. We have and are assessing areas that have lower long-term strategic fit, areas where we can't differentially pursue our mission to save and sustain lives, areas that have less attractive economics, and you can expect to see some divestitures or business exits along the way. At the heart of this is this idea of disciplined portfolio management. That's the hallmark of everything that we do. Along the way, I've had the opportunity to meet with all the rating agencies over the last few days, you know, we're very committed to this solid investment-grade credit rating. It has served us well over the 90-year history of this company. It serves us well in good times, but even better in more challenging times. We're focused on that. We're focused on maintaining pro forma liquidity, getting to a very flexible capital structure, which we intend to do in the near term, all the while returning value to our shareholders. Now, when we think about returning value to shareholders, you know, we've talked about the dividend in the past. I will tell you that in the face of the pandemic, we raised the dividend. In the face of the largest acquisition in the history of the company, we raised the dividend. You can expect continued dividend raises. We'll probably have one more year of lower growth dividend before we start to accelerate to at or above earnings growth as we approach a higher payout ratio. That's a really important aspect of our returning value to shareholders. In addition to that, we will buy back shares. We will buy companies. None of that is reflected in the financials that I've shared with you, and all of that will support a robust capital allocation approach. In the meantime, and in the short term, we are rapidly deleveraging. We've started to pay down some of the debt that we have so that by 2024, we achieve this 2.75x net debt to EBITDA. What's the summary sitting here in Glenview, Illinois? The summary is we have robust sales growth on the back of very durable end markets, along with some really exciting innovation. Through our commitment and discipline program methodologies, we'll expand operating margin 350 basis points-400 basis points by 2025. We'll, over this period, unlock low double-digit EPS growth compounded with no deployment of the balance sheet. We're committed to strong cash flow generation. In my view, that's the ultimate metric how you value businesses. We'll get to 80+% by 2025, and we expect that to continue thereafter. As always, we'll focus on returning value to our stakeholders with a very strategic and disciplined approach to capital allocation, which I hope you've come to expect from us. I'm really excited for the rest of the day. I'm so proud of all the colleagues that you'll get to see and the strategies that they're going to share, so excited about the pipeline and the portfolio, and so excited about the work that the next presenter is doing in terms of transforming Baxter's cost structure to take out $650 million in gross costs. As a child, I used to watch The Bionic Man. Most of the people in this room don't remember The Bionic Man. Steve Austin was the Six Million Dollar Man. James Borzi is the $600 million dollar man. My new best friend, without further ado, James. Good morning, everyone. Thanks for joining us here. Thanks for everybody that's here live, as well as all those joining us virtually. You know, I've been thinking a lot about what's on your mind from the investment community. I confirmed a lot of those assumptions, last evening as I had a chance to talk with some of you and this morning in the innovation hall. For me, I think the three things that resonated were, hey, what's different this time? What's different? We've heard this before. Hopefully through my presentation, you'll see what's different. Also, do we have a plan? I can confidently guarantee you we have a solid plan to deliver, the numbers that Jay just reviewed with you. Lastly, can we execute? I think in my two years, over, my tenure here at Baxter, I think we've proven that we can execute. We've built a great team, and I'm really excited this morning to share some of this with you. From an organizational perspective, the 36,000 employees that make up the integrated supply chain team across the globe are some of the best employees in the world, and I am extremely proud of these folks. These are the frontline people that never got a break all through COVID, were on the front lines. These 36,000 folks, along with the quality team, had to be there day in and day out to support the patients that we serve. I just wanna take a moment to publicly thank all of the ISC and quality team for the great work that they've done and they continue to do. We have an organization that is truly an end-to-end organization, covers planning, sourcing, manufacturing, and fulfillment. In addition, the supporting functions within the ISC, manufacturing, engineering, environmental health and safety and sustainability, and our operations excellence team, which is really driving the value that I'm gonna talk about here, today, along with the operations team and the fulfillment teams. We have about an $8 billion spend in procurement. We have over 800,000 freight lanes. I think that's the complexity I want you to take away that we're dealing with here as we serve those patients around the world that Jos é talked about. We have 65 manufacturing plants in 27 countries and have COGS of approximately $8 billion. We have a leadership team within the integrated supply chain team that, bar none, is the absolute best team I've ever worked with. Phenomenal leadership team, grounded in true experience. 27 years on average across my leadership team, 100% new to Baxter within the last two years. As we talk about transformation, I think it's important to focus on the bottom of the slide, because these are the key things that the foundation this transformation is built on are people, compliance, and resilience. Everything that we do from an integrated supply chain team is grounded there. We're well into the transformation. We've started this look across a true end-to-end look. We've built a strategic cost reduction, which I'll talk more about in a couple slides, called Value Improvement Process. The fundamental difference of, I'll call it pre James Borzi and current state, was we were really starting every year in January first, looking at what we needed to do. That's no longer the case. We have a pipeline of projects that span the LRP. In fact, I would tell you, we have projects that cover our commitments through over 65% in 2025. We are fully covered in 2023, and we have over 85% covered in 2024. We've never been that grounded in solid project management and execution, and I think it's gonna deliver not only on what Jay said, but this culture, this DNA that we're building into the organization, will deliver huge margin accretion post this inflationary cycle. Jay told you we have some of those inflationary pressures built into the plan, but I would ask you to think about the post-inflationary cycles and what happens with that margin accretion as these cost initiatives really start to take form. Jos é talked a little bit about the digitization. I will tell you, innovation does not just exist on the product side. It also exists on the process side. Every time I visit a plant, I am thoroughly amazed at the adoption rate of digitization tools and automation, and I'll talk a little bit more about that. I think the key things that really I want you to take away from this is, this is a solid plan. It's a transformation that's not just starting. It's well underway and will really deliver huge, bottom-line improvement for the company as we move forward. You know, I've been doing this a long time, over 38 years, and I gotta tell you, the culmination of challenges that COVID brought, the semiconductor shortage, oil prices, the war in Ukraine. All of those challenges culminated together in really driving over $600 million in gross inflationary pressure between 2020 and 2022. As you talk to anyone that works in supply chain and has had to deal with these challenges over the last two years-three years, it doesn't feel like two years-three years. It feels more like dog years to me. It's significant when you think about the impact that it's had. Resin prices, the dextrose that we buy. Just dextrose alone, we've seen a 65% increase, driven by record-high corn prices and energy costs. We've had significant challenges with semiconductors, and we're not the only ones dealing with those, but the team has really pulled together, the business has pulled together. The businesses, the R&D organization, along with the ISC, really working hard to mitigate our way through those challenges. Labor inflation and freight, the congestion in the ports, the closure of countries, just the increase in fuel costs alone. We spend over $1 billion in freight, so you can imagine the impact that oil has on our freight costs, and I'm gonna talk a little bit about what we're doing to address some of that. You heard Jay talk a little bit about the Value Improvement Process and the value drivers across materials, productivity, architecture, automation, and digitization and analytics. This process that we've built, and Jay talked a little bit about the review we had a couple days ago, I think for me, really grounded us in how achievable this plan is and how bright the future is. We're building this process into the DNA of the company so that this becomes a year-on-year improvement. It becomes a natural muscle for us. We'll deliver, as Jay said, over $650 million of gross savings by 2025, and you can see the cumulative effect over the LRP. I can tell you, when I joined Baxter, we were below 2%, and we'll reach a point where we can deliver year-on-year over 5% of gross savings. That more than offsets any inflationary pressures that we get and gives us great confidence in the performance of not only the ISC but the company. As we look at the value drivers, material over the LRP will deliver over 30% or roughly $200 million over the LRP. We're focused on dual sourcing. We're also playing to our strengths. You know, our process technology and our molding capability within the company allows us to insource a lot more of those parts that are currently with third parties. We plan to insource a lot of that along with the process technology. From an automation perspective, over the LRP, just in the Americas alone will deliver over $75 million of cost reduction through automation and digitization. Things like automated filling, packaging, inspection, a lot of these integrated vision systems, which are far superior to any human inspecting product. We're adapting this technology at a rapid pace, and I'm very proud of the team for the great work that they've done. The analytics tools that we've brought. We invest a lot of money in the operations each and every year, and the tools that we've brought in to the planning organization, the sourcing organization, and the fulfillment organization really give us great ability to control our cost. It gives us great ability to see things that we haven't been able to see in the past. Our control tower, for example, will give us the visibility to see across the entire supply chain, from raw material to work and process, to our fulfillment centers, and to those deliveries to our customers. It will not only deliver cost savings, and you heard me talk about how much money we spend on freight, but it will also improve our service levels to our customers and the patients that we serve, and that's the most important thing. We have this disciplined governance in place to drive to the savings that we've talked about here this morning. Jos é mentioned our manufacturing footprint and our distribution footprint. Times are different, and we need to be managing much differently than we have in the past. We're adopting a strategy of make where you sell and buy where you make. We're changing that footprint. As you can see in this chart, these percentages really represent the localized production levels within each of the three regions that we operate in. Over the LRP, we will have 92% of our manufacturing footprint located in the Americas that serve the Americas, 89% in EMEA, and 87% in Asia-Pac. What that does is not only helps us reduce our freight cost, but it improves our service levels to our customers. In times like we're dealing with now, this is a huge advantage for Baxter. Over the LRP, we'll see about a 10% improvement in our network architecture between manufacturing and our fulfillment centers across the globe. With that, it's really about the supply chain becoming a competitive advantage for Baxter. We're accelerating our transformation, and that transformation is both cultural and operational in nature. We're simplifying our processes to build speed and agility through lean. The adaptation of lean and flow and day-to-day management within our factories and fulfillment centers are driving a lot of cost opportunities that quite frankly, weren't visible before. Again, this margin accretion that we get from these initiatives, think about it post-inflationary cycle, because everyone in the room understands these things also turn the other way. Right now, they're not necessarily in our favor, but when this turns, this part of our culture that's built into the DNA of the operations and in the supply chain, will drive significant competitive advantage for Baxter. With that, I wanna close just by thanking you again for your attendance here this morning and online. I'll ask Clare to come on up, and we'll start the first Q&A session. Thank you. Thanks, everyone. I'll just remind you, if you do have a question, we have microphone handlers there, so just raise your hand. Unfortunately, I can't really see because it's very bright up here, but we'll have someone come to you. Janet and Joe are on the sides. They'll do it, and we'll address the questions too. Why don't we start over with Joe over there? Joe, if you wanna grab. Hi, good morning, and thanks for putting together the investor day. It's really helpful. Travis, you wanna introduce yourself so we know? Travis Steed, Bank of America. Jay, I guess I'll start with you. Looking at the margin progression over the LRP, wanted to talk about 2023 specifically. Not surprising, given that's the first year out of the gate. It sounds like 75 basis points is probably the right place to be for 2023, given it's a transition year. On EPS, are you still committed to double-digit earnings growth in 2023? Thanks for the question, Travis. Thanks for joining us here in person. It's great to see you. From an operating margin standpoint, basically we said 350 basis points-400 basis points. We have clear line of sight to that, and minimum 75 basis points in a given year. At this point, it's a little hard to discern exactly how that's gonna shake out in 2023. There's a lot of different variables in play. Is there a recession? How sustained is it? What's happening with interest rates? What's happening with overall tax reform? We feel very good about a minimum 75 basis point expectation for 2023. And then as far as earnings goes, you know, we'll have to watch. You know, things like when we choose to refinance debt and how we choose to do that becomes an important gating factor as far as earnings growth in 2023. I think it's a bit premature to get into specifics on 2023 EPS, but we are totally committed to working so hard to deliver this plan. Compounded annual growth of double digits on the EPS line with 350 basis points-400 basis points of margin expansion, minimum 75 basis points in a year. On 2022, it looks like you're reaffirming the guidance for 2022 on margins. Has there been any incremental changes on the inflationary pressures to the positive or negative since you gave the guidance? I did want to ask on divestitures as well, trying to think about like how you're thinking about is that something can happen more near-term in the LRP or later in the LRP. As far as the 2022 margin, we have no change to guidance at this point. You know, we've been hard at work, really trying to isolate and identify the impacts as far as margin drivers and inflationary pressures go. We've been looking at this for a long time. I know as you all know that. I think we've got it pegged correctly at this point. We'll continue to watch it as we move forward here, but no change to guidance at this point. As far as divestitures, we don't really get into the timing of when divestitures are gonna take place. Our expectation is there are a couple of areas that we're looking at, and we're really refining our views on those businesses and how they fit with overall Baxter. We'll pursue it as swiftly as possible, but you know, you never wanna sort of put a timeline on a divestiture because for us, we're optimizing economics, not timeline, in terms of the approach to the portfolio optimization. There is a specific couple of specific programs right now that's being run primarily by our FP&A group in the company. Aaron Bloomer is running that, as well as our- Strategy and M&A group. We have specific programs addressing, and it's all about capital allocation. Where we're gonna put the money and what does not belong to Baxter. We should have more news that towards the middle to the end of the year. Thanks. Gina, why don't we come to this room, this side of the room. Vijay, we'll start with you. We'll go back and forth. Vijay. Vijay, right up. Right up here, Gina, yep. Joe and Jim. This is Vijay from Evercore. Thank you guys for hosting this. It's good to see people in person. One, maybe Jos é, a big picture for you. The LRP doesn't assume a global recession, and there has also been some concerns in hospital CapEx environment. Maybe could you address from a big picture perspective. Mm-hmm If we did get into a global recession, if the hospital CapEx environment did tighten, what would be the sensitivity to Baxter in such a scenario? We have a pretty diverse portfolio, but you'll notice that we have products now that are getting into the more expensive side of the expenditures in hospitals. What is actually capital for a hospital? I would like to think a little different. I think about what is a large expense for a hospital, even if the one product specifically doesn't qualify as capital, it's still a large investment. That cycle, we're watching very closely. I believe with some of the results that we've seen lately from hospitals indicates that they will be tightening the belt. We don't know yet. So far, remember, we still have a healthcare crisis that has not abated much, despite the fact that hospitalizations are down, but we see waves probably in the future of more issues with the current virus. I would say that, we're watching very closely. What we have accounted is, like Jay said, not a major disruption. A recession would be large expenditures for hospitals being shut down that will affect part of our business, and we'll keep our eye on it. So far we haven't seen this. We're gonna have some of the presence here today in the session after me, after us today. At the very end, we have a Q&A with the presidents. You can ask that question more specifically. You have Heather here, you have Amy, who can give you more specifics. From the company point of view, if there is a recession, there is a capital reduction in hospitals, will impact some of our sales. What I can tell you is we are not only in capital sales. We have a significant amount of medically necessary products in our portfolio. While the question here is, did Baxter learn the lessons of the past in terms of what products should we be putting in inventory and making? To that end, I think we have, and we're working very hard to stock up the shelves. That's why you see inventory going up. I think we're gonna be more prepared this time. It's a long answer for a very simple question. The answer is, it would affect Baxter if comes in a large volume, but the company was not 100% dependent on those products. The only thing to add to that, Vijay, is if you recall the last recession, the price of oil went from $130- $40, and the inflationary environment radically changed. What James talked about, this state where we get to a different inflationary environment, that would clearly be accelerated by a recession. That's just another factor in play. That's helpful, Jay. One for you on the EPS trajectory, low double digits. The model is not assuming any capital deployment, you know. Even at 80% conversion, you should be having cumulative $8+ billion of free cash to play with over the next three years. Are there any below the line items when you think about interest rate sensitivity? Is there any floating rate debt that could change the model? Anything on the tax line? 'Cause it seems like just with that amount of free cash, there should be a teens earnings outlook for Baxter. Look, I was very deliberate in my comments. We're not assuming any deployment of the balance sheet in the projections that we're sharing. You've done the math. I didn't quite hear your figure, but there's a very substantial buildup of cash at the end of this plan to the billions. We're going to use that to pay down some debt, to buy companies, to buy shares, all of which will change the complexion of this company by 2025, in potentially a meaningful way. I think that's. You know, what I said earlier was, I think one of the more interesting things that this plan will deliver for us is the options. There's gonna be tremendous options from a business development standpoint. There will be opportunities to buy shares as there typically is. I think that's a really exciting aspect of what this plan allows us to look at in the coming years. In the very short term, it's a little more limited 'cause our first port of call is to achieving this 2.75 net debt, which we will do swiftly. Beyond that, we have a significant cash build that makes things quite interesting for our capital allocators. Thanks. Just in the interest of time, we'll ask you to have one question with one follow-up. Joe, we'll go over to you, Pito, next. Hey. Good morning, guys. Thanks for putting this together. It's Pito Chickering from Deutsche Bank. So a quick question on the 2025 guidance. It's about, you know, a little over $1 billion of operating income from 2022. If we assume a 45% gross margin on the $200 million of additional Hillrom revenue synergies, plus the Hillrom synergies, it gets about $440 million of OI from- Hillrom in 2025 and 2022, which implies sort of core operating income of growth about $650 million. Can you sort of walk us through the $600 million of inflationary pressures from 2020- 2022 versus sort of that non-Hillrom growth embedded within 2025 guidance? Okay. That's a complicated question there, Pito. Maybe I'll just try to give you a little bit of guidance. Clearly, Hillrom is an accelerant to our performance, both the base growth of those businesses, along with the synergies from a sales standpoint, along with the cost opportunity that we've identified and are getting after. Then beyond that, you know, you look at the base business, and when we talk about Jim's programs, we have embedded from 2023 on, you know, a couple hundred basis points of inflation per year that's dragging down the true gross nature of the savings that he's getting after. In addition to that, we are also really deliberately protecting investments in R&D, along with prote... Investments in certain sales and marketing areas—it's another thing that's impacting the margin in 2025. Said another way, and put simply, if we were to just optimize for 2025, well, we could save a lot more than we've put on the page. But for us, those reinvestments are something that are extremely important to guaranteeing the long-term value of the company and something we're very focused on delivering on. I think those are a few things in play, and then when you couple that with the idea that, you know, the core base Baxter business, you can do the math, but it's still in excess of the WAMGRs that we're faced with. And so roughly 3%-3.5% WAMGR, I think, for core base Baxter. That base business growth also contributes. All of that together is the margin story of Baxter. I'm not sure if that answered your question. I may have to read the transcript to really get at what you were after there, but. I think the question is, are you, when you do the math, the number that you arrive is higher than what we're presenting. The question is, Jay just explained some of the things that we built in to be able to offset. If I understood, was a little roundabout mathematics, but I think- Which actually is a great segue is sort of R&D. Historically, R&D has been a source of margin expansion for you guys versus a margin contraction. I guess, you know, what led to this change as you think about R&D investments and ROIC? How do you guys think about ROIC and R&D today versus three years ago, and sort of why you guys are making the change? Maybe I take this on. As you have to think about relentless capital allocation going forward as you look at the growth of the business. The business is quite diverse, so where do you actually invest is in the places that are gonna grow faster. If you take a very legacy Baxter, the R&D cycles are very long versus what we're seeing now with connected care, a much quicker cycle, but you need to invest fast, and you need to invest up front versus a traditional R&D program with multi or several gates. The gates are still there, but they're much shorter. We believe that we can achieve the top line growth if we continue to invest. If you look at and say, "But we were close to 5% in 2015, 2016, and it went down," don't forget that we had a lot of arbitrage of labor in the numbers as well. We took out some very large programs, like home HD was one of them that was very expensive and some other things that we did. And also, we put a lot of employees and software engineers in lower cost country with arbitrage. If you look our efficiency in research and development actually went up. Our expenditure came down. Now is the point now that we need to invest faster, so you're gonna see the 4% going north, as Jay just highlighted. It's all about a combination of optimize R&D when I first came in. Now let's deploy more cash to R&D because we have high confidence in the research groups of the company. Sorry, I saw Joanne go up first. Thanks. Joanne Wuensch from Citi. I'm curious about something. There's a slide you put up there where you're showing market growth rates of 3%-4%, but your LRP is for 4%-5%, and then at the end of the 2025 period, you're looking at 5%+ markets. Do we extrapolate from that you think your revenue growth is gonna grow higher than it? Joanne, in my slide, if I recall, says the aspiration is to be in with a WAMGR of 5%+ beginning 2026. Okay. That will depend on our capital deployment. Are we gonna go into adjacent markets with faster growth? Look what Hillrom did to Baxter. We're gonna continue to look for opportunities to go with higher WAMGR than Baxter legacy as always. Also getting into other markets organically. We will push that number up. Aspiration is where we wanna get. We will depend once we have the debt repayment in place we want, as Jay said, about making sure our credit ratings are where we want, and that's important to us. That deployment of multibillion-dollar balance sheet has to be in places that will help the number get to five. That's the aspiration. That's the plan. So- Excuse me, as you move to that level, what is the next frontier? Our aspiration is to move the company north of that, if we deploy capital correctly. My follow-up: you mentioned twice cardiology. Is there anything specific you're thinking about? Or how do you invest that capital in your next step? Great question for Reaz Rasul, but I'm gonna try to give a less competent answer than he would. It is an area of growth, not cardiology in general. Don't think about us as interventional cardiology company, but it's the part that creates the monitoring, the connection, and the predictability of getting data that will prevent somebody from having a cardiac event. You think about us as the next step we're gonna talk about in the cloud processing of cardiology data that is collected from people walking around. It can be who has our sensors. What is after that? What is after that? Some adjacencies in that. As soon as we start getting in a position to deploy capital, we will deploy capital, I'm sure, in targets that are in the cardiology. We like that. It's high margin, high growth, and goes right into our mission of saving and sustaining lives. We're gonna go back to the side. Matt Miksic. Thank you. And then we'll- Matt Miksic, KeyBanc. Thank you for hosting today. Looking at some of the slides, when I think about Hillrom and, you know, Frontline Care and then PSS and GSS, I think about that pre-COVID as a 4%-5% grower striving to be 5%+, maybe 5%-6%. You guys have it accelerating to 6%-7% and kinda 8%-9%. What have you guys seen in the portfolio that's giving you the confidence to, like, change the growth profile from those areas? It is a great question for Amy, and we ask, save those there. I don't wanna preempt them. This will be the first question. We're gonna hold this question when they are sitting here that I want them to answer. I can answer as always less competently than they can. I wanted them to give you a wholesome answer. There are some specific programs, our surfaces, our contactless monitoring, our cardiology aspirations and other things that are really good that will make those numbers grow. We will, they'll be the right people. Just as part of their presentation, they'll walk you through what the growth drivers are for those businesses. Okay, excellent. The other side of that is, last September, you said that core Baxter over a three-year to four-year period would be growing at 4%-5%. Clearly, Hillrom is coming in and accelerating the growth. What part of core Baxter is coming in a little bit slower and maybe decelerating a little bit? One of the things that we noticed is the step back that peritoneal dialysis took and dialysis took in just renal with COVID was a significant impact in reduction of current patients. That business has good prospects for growth, but there was a reduction in that, and then going forward will pick up again. Some parts of the business, that is one of them, the competition in pharmaceuticals. You're gonna see that clearly when George comes up here, he will tell you what is the decision, what are the decisions that we made in terms of portfolio, because that is a highly competitive business, and it's a business that is tough. We're good at it, at what we do. Specifically, we're not good at everything, but exactly what we do. That's how repositioning portfolio will help go forward. If I think about these are the two major changes that we had from then to now. We'll go with Robert next, Joe, and then Jayson. Thanks. Robert Marcus, JP Morgan. Jay, appreciate the guidance, especially on operating margin. You made the comment 75 basis points or more in any year. I imagine that means it's a nonlinear progression. How should we think about, two-part question, the cadence? Are there certain years that should be a lot more? Is it back-end weighted? And how do we think about the split of contribution between SG&A and gross margin? Sure. Next year, there are still some overhangs that we're grinding through. The availability of electronic components, the continued inflationary environment that is kind of annualized into next year. There are a couple of things that impact 2023, which is why I said minimum 75 basis points accelerating thereafter. I think 2024 and 2025 are a little more similar in terms of the expansion that we'll see in those years. You know, we haven't finalized 2023 yet. We're far away from that. We are hard at work identifying different vehicles to accelerate margin improvement in that particular year. As far as the complexion between gross margin and operating margin or gross margin and SG&A, what I will say is the lion's share, the vast majority of the programs that James has outlined will accrue to the gross margin line, and the majority of the Hillrom savings will accrue to the SG&A line. That's really that. Then beyond that, it's kind of normal business growth and improvement that you would see with Baxter. With those things, I think you can safely model both gross margin and SG&A percentage. Is 50/50 split a good place to start? I think that's a decent ballpark. Joe, you talked in the release today about $200 million in sales synergies between Hillrom and Baxter. I'm sure we'll hear a lot more about this later on, but any of the programs or products specifically that you'd highlight that you're most interested in seeing? Robert, I'm gonna answer your question, but I wanna preempt. Our COO has phenomenal data to talk to you about, but I tell you, let's think about a couple of things. Think about our pumps communicating to the nursing. I was at an ER the other day, and with COVID actually. And the alarms behind me were going crazy. That hospital specifically doesn't have Voalte. It should have, because if they had Voalte, we would have been notified, and I will silence my own alarms and dealing with this stuff in the back, because it was so annoying. Think about a pump that needs to be attended to. Depends. A pump will alarm for multiple thousand different reasons, but there's few reasons why you need to be really quick in attending. Imagine that pump alarming connected to a Voalte that is specific. Tell the nurse, "Go see this. This is important." Think about that connected to a hemodynamic monitor that now is telling you you are overloading a patient with fluid, you should stop. Go see this. Why? Because that is an indication of potentially sepsis. Just think about this basic stuff that I just told you. There's more than that. There's geographic expansion is another one. There's ability to create top-line growth in Asia-Pacific and Europe, Middle East, and Africa, and South America and Latin America, and Canada. There are just few things that we can actually do to accelerate. We didn't promise this in the beginning as we needed to understand more about the portfolio, but we feel excited about the prospects, and the aspiration is actually to go in and start connecting these devices. It is handpicked examples, and we have programs that will enhance that. One last comment I would like to make about research and development, 'cause you asked the question, we have a pretty significant increase in spending. Don't think that is 100% going to new products. One thing that we are doing, James needs a lot of support from every R&D function in the company because we are going in and redesigning boards, redesigning component usage, redesigning resins and getting backup. All these programs that we're doing with such thoroughness right now require significant research and development sign-off. We need to increase expenses in R&D. We know visible expectation that that's gonna change the top line, more so we'll guarantee that the top line doesn't get affected by the next crisis of supply chain. Today, we control the lowest level of components in any products of ours. We know where it goes, who is making it before it goes to a Flex or a Jabil or a Benchmark, anybody assembling the product. That kind of control we never had to worry about because Flex was doing their job, and Flex does a great job. It's not about Flex, it's about us understanding that. Think about R&D not only in innovation, but also creating sustainability of the current products. We'll take one more question from Jayson over here. Hi. Jayson Bedford from Raymond James. I wanted to ask a question maybe to the most important person on stage, and that's James. Yeah, yeah. James, you kinda highlighted the increase in material labor freight cost over the last couple years. Outside of the ongoing chip issues and crude, are you still seeing other input costs increase? And when do you think we'll start to see some stabilization, and what needs to happen before we see that stabilization? Yeah. I think oil drives a significant impact for us. For every $10 of price oil increase, it's about $25 million of impact for us between, you know, material and freight. I think as oil goes, that will help us significantly, and as Jay said, you know, we're hopeful that it returns back to a $70 barrel level in the, you know, in 2025, and we'll show or we see a gradual decrease across the LRP. That's a significant driver for us. And that's the one we watch the closest, quite frankly, is the price of oil. Okay. Just one moment on the oil. You've gotta understand there's a difference between diesel and oil. They are detached prices right now. You're gonna see diesel going through the roof, as you see right now gasoline, but the price of oil affects us in different ways. Diesel affects how we transport goods, but the price of oil affect our resins. There is something that we're considering is the decoupling of them. Second is the dislocation of oil supply because if Europe is buying the significant amount of oil from Russia, who will that oil be positioned to? As Europe continues to reduce their dependency, is that immediate? Is there an embargo right away? Is a transition into six months where the oil, the dislocation actually creates an opportunity for oil to stabilize in price? We have modeled many different ways and but we're not clairvoyants, so we're trying to get as much as we can. Think about oil in different dimensions. It's not oil in general. It's oil for diesel, which we consume a lot, as well as resins. Just a follow-up on the chip shortages. A little surprised that's gonna continue into 2023 or you anticipate it continuing into 2023. Is there a top-line impact on that? Jay, you've talked about a backlog of orders. At what point does the backlog of orders stop going higher, and when does it normalize? Sure. I think that we anticipate the situation to be much more normal in 2023, but in many areas, we are hand to mouth with supply of electronic components. I think we've accurately reflected in the sales forecast that we've put together. You know, if you think about even this year, we had the delay of Novum, and historically, we have offset those sales with sales of Spectrum. Because of the availability of electronic components, we were unable to do that to any large extent. We do expect that to change, and it may, depending on general macroeconomic conditions, it may change even faster than the second half of next year. As we look at our overall modeling, I think that's the underlying assumption, and we've reflected it primarily in the sales line as we look at it. James, I don't know if you wanna add anything to that. No, I think you said it right. I think it's largely driven by, you know, semiconductor availability. I think that, you know, depending on those macro level indicators, what happens, it could be sooner, and we're hopeful that it's sooner, but we're also not looking forward to a recession either by a long shot so. It's recession-dependent. Can play in our favor or not. The recession actually creates less necessity for semiconductors. You know, the foundries have changed quite a bit their mix and. But once you start on one line, it takes three months-six months to change the mix of a, of a, like a TSMC, for instance, which is a supplier into TI, into ADI, into Qualcomm, and that is an issue. I think we don't wish a recession, but recession has couple levers, including labor cost, you know, which has escalated tremendously in the last 24 months. Thanks everyone for your questions. We're gonna take a very short break as we gear up for our next presentation. About five minutes. If anyone wants to get up, stretch their legs, and then we're going to start with Giuseppe Accogli. Welcome back. Next, transform Baxter to transform healthcare. Okay. Can you hear me? Good. Let's wait a few seconds. I think we can start. Good morning, everyone, and welcome to the One Baxter Vision and Strategy. My name is Giuseppe Accogli, I'm the COO of Baxter. Accelerating Baxter transformation to deliver better outcomes. That is the phrase that summarizes, at best, our vision and plan. It's a very simple one. Two things to remember is accelerating the transformation to deliver better outcomes. What we're gonna do in the next 30 minutes or so is understand how, and those were some of the questions that we already received, how Hillrom can help us to accelerate this transformation we were going already through. Giving you examples of how we are gonna do that and what that means, how we monetize that. Right. First of all, why accelerating transformation? Because as Joe shared with you, we were already going through a transformation at Baxter. Now we think with Hillrom we have a unique opportunity to accelerate that transformation to deliver outcomes, which are outcomes for the patients, being clinical outcome. Outcomes for the customers, giving them more cost-effective therapies and product. Outcomes for you, being the shareholders of the company, giving accelerated, profitable growth. You have seen this slide with Jos é, right? Where we have the vision. The mission, the vision, and the strategic pillars. You have seen the strategic pillar are four: innovation, market expansion, operational efficiency, and capital allocation. The GBU presidents will go through each strategy for each GBU in a vertical way, saying and explaining and sharing with you what they are gonna do in each of the pillars. I'm gonna do something a little bit different. I'm gonna focus on the three catalysts that are common to all the GBUs. These three catalysts are connected care. I'm sure you're asking yourself what that means, how we monetize that, how that works, right? We will go through that. The second one is site of care expansion, which is very, very exciting, and you will understand the opportunity behind that. The third one is portfolio management, which is one of the lever of the capital allocation. Let's go a little bit more into the details here. Portfolio management. As José shared, we will continue our optimal capital allocation by disproportionally investing in products that play in high growth therapies or under-penetrated opportunities. Okay. We are already at legacy Baxter, some of those. We had PD, we had Acute, businesses that were playing in markets that were growing. Now we are adding with Hillrom many more of those franchises. You will see the details, which are the franchises, one of these being cardiology, and we're gonna explain what cardiology means for us, right? The second catalyst is site of care expansion. Why is that important? Baxter has historically been focused on hospital, the acute setting. Now, with Hillrom, we strengthen our position there. Think about what we can do in med-surg department, okay? We will go a little bit more into the detail of that. But we also expanded in site of care that are growing faster, like home care, like alternate site of care. Now we have a bigger role there. What is also exciting is the overlap of the therapies in those sites. Think about a PD patient. 20%-40% of those patients have cardiac complications. Now we play in cardiology. What is even more exciting is not only, you know, the strengthening of the position in the hospital, the presence in the different site of care, but is the aspiration through our technologies, sensing technology, to serve and follow the patient across the continuum of care when you think long-term, and this is not reflected in the LFP numbers that Jay shared with you. Last but not least is connected care. What's connected care? Is that a market? How much is growing? No, it's not a market. It's an ecosystem of three things. Smart devices, communication and connectivity. Smart devices are devices that are able to capture data. Communication and connectivity for those data to be delivered to the caregivers in the right way, at the right time, which is real-time. Insights and analytics to drive and to guide the medical decision. When we do, not if we do, but when we do this, we think we will play in markets that have a WAMGR of 5%. We have demonstrated that usually we beat with our CAGR the WAMGR we play in. Let's go a little bit more into the details of each single pillar. Let's start with portfolio management. I want you to focus on the left side of the slide, the blue box, because there you have the journey and you have the aspiration. What that says is that we aspire to have 55.0% of our sales coming from high-growth categories products. Which we define categories that are growing more than 5% in market growth. Once you read in the middle there, the names of those franchise, you understand where we want to put our money. We say disproportionately invest in these high-growth franchises. You see an interesting mix of legacy Baxter products like acute and PD, one being an example of high-growth business, the other one being an under-penetrated therapy versus the medical need. You see as well a lot of products coming from legacy Hillrom. This tells you how Hillrom is accelerating the transformation of our portfolio, how Hillrom is impacting the WAMGR of the company. You have connected care, you have intelligent diagnostics, you have respiratory health, you have vision care that is under-penetrated versus the market need, versus the medical need, okay? By investing in new product development in these therapies and investing in market development, because many of those therapy are under-penetrated. Think about PD, think about vision care. Only one-third of the patients that are diabetic, they go through the annual check of their retina health. What if we can expand that under-penetrated therapy? Hopefully, in this slide, what you get is the potential of the transformation, how we will impact our WAMGR in the future and the CAGR. Let's move now to the site of care. I want you to read this slide starting from the top in a horizontal way, so that you will appreciate the journey we are going through. Baxter has always historically been focused on hospital care, right? Acute settings. Why we are better now? Because now with Hillrom, we strengthen our position there. You were looking for examples, right? Think about a low acuity department, a med surg department. What can we offer there? We can offer the two most broadly used product in a hospital, that are pumps and beds. By the way, the beds are not a piece of furniture. The beds are smart now, means they capture data. They have sensors. They can tell you the cardiac rate, the heart rate, the respiratory rate. They can triangulate this data and predict potential complication and avoid that. We can give these two things in a med-surg department. We can complement that offer with monitoring. We are a leader in monitoring, in multi-parameter monitors, thanks to Hillrom. Now you see how Hillrom can transform our offer in med-surg department. What we can do even more, this is connecting the dots between all the franchises that we have. We can communicate this data with both communication. Where? To the mobile of the caregiver, so they know in real time what's going on with the patient. What that means is better treatment and better workflow efficiencies, which is the goal that we said at the beginning, transform to deliver outcomes. I'm very excited about what we can do together with hillrom portfolio in hospital care. Even more excited when I think about home care. Now, I want you to follow me in one of the example. I mean, you were asking, you know, how that will work, the portfolio and so on. One of the example being a PD patient treated at home. Why hillrom can be important for that patient? I mean, that's a PD patient, right? I mean, doing PD treatment, peritoneal dialysis treatment. What's the deal with hillrom? Think about the journey of that patient. That patient a few years back had a cycler, which is a machine, right? Delivering fluids for peritoneal dialysis. That machine was reliable, not yet smart. We made that machine smart, that machine available and capable to collect data, and what we added to that was ShareSource, which is a two-way system that interacts with the clinic, send data to the clinic and receive data back from the clinic. What can we do now with hillrom? You know that 20%-40% of the PD patients have cardiac issues. Can we treat them better, help the caregiver to treat them better? We can. Why? Because now with hillrom, we have the blood pressure data. We have cardiac data. Some of these patients need to be monitored from a cardiac point of view. Do we have those products? Yeah, in what we call our cardiology franchise. Think about the last step that now we can do with hillrom care is communication. We can take all this data, and we can help that patient to interact with the clinic. Now we are using Voalte communication in all hospitals. If we can use that at home in the future, we have much more compliance that drives outcomes. We go back to the vision. Why we are doing all of this is to deliver better outcomes for the patients. I'm excited about this. Last but not least, alternate site of care. The name to remember is Welch Allyn, right? Now we have a presence there in a segment where we were not playing in. We have a strong commercial organization. We have a critical mass of product to play in growing segments like hospital at home, and you know that we have invested in that. You put everything together, you see how we can play a stronger role in the hospital. We expanded our input in home and alternate site of care. In longer term, we have the aspiration to connect the dots and follow the patient across the continuum of care, which is an additional opportunity. The third catalyst we are going through is connected care. Again, let's ground ourselves on what connected care is. It's not a market, so the question is now not how much connected care is growing as a market. Connected care is an ecosystem of three things, smart devices able to capture data, communication and connectivity, so that we can send those data to the caregivers, and then analytics of data. What's behind the data that we want to deliver to the caregivers? Was Baxter working in that, or is something new? If we are coherent with what we are telling you, right, an acceleration of transformation, you can understand that Baxter was already working on that. Look at the product that we launched in the last few years. The vast majority of those products were connected smart devices or connectable smart devices. This is where we have put a lot of money. Was Baxter successful in the second element of communication and connectivity? We were the first one developing something like Sharesource for dialysis patient treated at home. Were we successful with that? We have right now 32 million therapies captured with Sharesource, and we were able to deliver better outcomes for the patient. In fact, now the patients stay on therapy three point four months more. Why is that important? It's important for the patient because better quality of life for patients that are in PD versus going into the hospital, into the clinics three times per week for four hours. It's important as well for our company. Think about if patient in PD stays between two years or three years in therapy, now we are prolonging that therapy by 10%, right? Almost three months plus. That is very important. It's very important for the patient first, and by the way, the patient in PD have a better bridge to be transplanted, which is very good to keep staying in PD, and it's good for the company as well. Connected care is not new to Baxter, but with home, we can accelerate the pace. Look at the number in the middle of the slide. We have today 2 million smart devices installed in the field. 2 million smart devices that capture a lot of data. With a lot of value, right? Are we better now with Hillrom on communication and connectivity? We are. Think about Voalte communication. You know what Voalte communication is? I will put it and, sorry for that, Amy, in a very simple way, what we do is we capture data, and we send the data in real-time to the mobile tools of the caregiver so that they can have a better workflow efficiency, and they can treat the patient better and better outcome. We have those competencies now, thanks to Hillrom. The third element is the analytics. Are we good in analytics? We are. We are developing that internally, predictive analytics. Think about our beds. They capture data, and they analyze the data. They can predict early complication for the patient. We are very excited. If you are looking for number, there is an important number there in the middle of the slide. We expect to generate 60% of the new product sales by 2025 coming from connected care. What is even more exciting is how connected care can change our business model. In the past, we were selling product. In the future, we are gonna sell solutions. We are gonna have much more recurring sales because the customer, they understand the value of the data, and they are ready to subscribe for the services that we are giving them. Think about MyPD, and we have that in our booth here. We are excited about connected care as well for the impact that that is gonna have on our business model. If you want an example, there are many, right? One example is fluid management. This is an interesting one. Okay, what is fluid management? Why the balance of the fluid is important in an ICU? Because you have too little fluid level in a patient, you can have kidney issues. You have too much fluid, then you have heart issues. You want to have a balanced position. I want you to focus on the extreme right of the slide. You see all those small pictures of products. That is, in reality, big stuff. All those products can drive a better fluid management for the patients. What we have at Baxter, you were looking for synergies, how the product will work together. This is a good example. We have pumps that give fluids. We have CRRT monitors that take out fluids, and we have the Starling product that we bought from Cheetah Medical that monitor that. We have the beds that can add other critical data to fluid management. We can send those information, thanks to Voalte communication, to the caregiver at the right time, and we can do analytics of that. We can impact fluid management and reduce organ complication a lot with our portfolio. That portfolio is a mix of legacy Baxter and legacy Hillrom products. Is that long term? Can we do something short term? Yes, we can. You move on left side now of the slide. We can connect our pumps and our beds to Voalte communication and deliver this data starting now. By the way, we are already investing in that. We put aside money in R&D to do that now. I think you share the same background my old friend, Jay Saccaro has, right? When I present this, he's always like, "Is this a PowerPoint presentation or there are numbers behind that?" Okay, the numbers, unfortunately, we shared already the press release, right? $200 million in sales by 2025 coming from the pillars I told you. Channel expansion, meaning presence in different segments. Geographic expansion, you know that Hillrom is not as present as Baxter is outside of U.S. Services and R&D, new projects, new product development, putting the products together. If I would retitle or rebrand this slide, I will use the title More to Come. Because as you can imagine, this is the short-term impact, right? $200 million. But many of the R&D project and MPD project, they need more time to deliver results. Again, more to come here. But we are excited because the more we go into how the product portfolio fit together, the more excited we are. In conclusion, you remember the phrase I shared with you at the beginning, accelerate Baxter's transformation to deliver better outcome. If we focus on portfolio management, and now we have a different portfolio than we had before the Hillrom acquisition, and we focus on the right capital allocation, if we focus on the different site of care opportunities that we have, if we focus when it comes to innovation to connected care, we are gonna have a WAMGR in the future that is higher than 5%, and we usually beat that in our CAGR. I hope you share with me the excitement, and you have, with some example, a better understanding of how Hillrom is already contributing and will contribute to transform Baxter and to transform healthcare. We are now gonna switch gears, and after this high-level view of the One Baxter strategy, we are gonna go into the GBUs, right? Into each of the GBUs, and we will start with advanced surgery. We recently announced a new global president of Advanced Surgery, Steve Wallace, that comes to Baxter from Stryker, and brings to Baxter a lot of experience in surgeries, in the surgical market. He's too new. It was really borderline because he joined us on Monday. We thought that, you know, if you just were faster a couple of days, you would be here presenting Advanced Surgery. We thought that being too new, I will share with you the strategy of Advanced Surgery at global level. We maybe can start with a video, and then we go into the details of the strategy. Okay. Advanced Surgery, I think we can start with this who we are, why Advanced Surgery for us is exciting. At the end of the day, it's not a lot of connected care as you can imagine, right? Why that is exciting? Because despite the perception that we play in a mature market, in reality, we play in under-penetrated market opportunities. I will give you two example of those, and we will go a little bit more into the details. Think about hemostats, right? How you stop the bleed in a surgical procedure. You can do that in two ways. One is more natural, the other one is the most used. The more natural one is using active methods to stop the bleed. What you want to do, you want to use products that are made by thrombin, so that you mimic the coagulation that happen in our body normally during a surgical procedure. This is what we have. We have active methods of stop the bleed, versus what we see in the market is more passive methods, mechanical compression to stop the bleed. We see there an under-penetrated opportunity, as we see an under-penetrated opportunity being the adhesion prevention, which is a big deal. We will go a little bit more into the details. That is a $2 billion cost for the healthcare system in the U.S. only. You think about that. You think about surgeries, you are like, "Hey, you are in mature market." We're not. We are in under-penetrated market, and we have a portfolio that is very diversified and is clinically proven. Seprafilm has 21 clinical studies. Tisseel, 2,500 publications. A lot of publications with Floseal. We serve 14 surgical specialties, and we have, again, clinical proof and proof that our product can contribute to efficiencies in OR. This is a $3.5 billion market growing a CAGR 3%-4%, getting to almost $4 billion by the end of 2025. We see the typical market opportunity. Customers are looking for cost efficiencies, medically proven product. We have those solutions. Customers are really focusing on blood management, because not all the bleeds are the same, right? The patients are getting more complex, with more comorbidities, more use of drugs. We see that as an opportunity for active sealants usage. We see the procedures going up to pre-COVID level by the end of 2022. The challenges are the typical challenges of healthcare: financial pressure, and most recently, staffing shortages. This translate into the opportunities, right? Because as we have that, the customer are looking for more cost-efficient solutions, which we have. This is a $1 billion business for us. The big side of the business is on your left, okay? It's hemostat and sealants and adhesion prevention. Hemostat and sealants being the way you stop the bleed and you close the wound, right? We have big brands there. We have Floseal, we have Tisseel, we acquired Recothrom. We have a lot of clinical data supporting these products. We see again, the opportunity of this product being under-penetrated versus the medical need. Adhesion prevention, I told you, up to 93% of the abdominal surgery has complication adhesions. That brings an additional cost to the system of $2 billion. We bought a product called Seprafilm, which is a bioabsorbable film that help us to play in this interesting segment. We have also microsurgery that came to Baxter through an acquisition, and tissue and bone repair. Both of them cover almost 15% of our sales. Let's go to the strategy, how we are gonna deliver 4%-5% CAGR versus a market we said is a 3%-4% growth. We are gonna deliver through innovation. Which kind of innovation we have? It's very simple to memorize. We have two drivers of innovation. One is extending the usage of our current product into new specialties. So think about developing applicators, okay, so that you can use the product in different specialties. Or think about increasing the cost effectiveness of our product, having product that are more ready to use in the OR. The second driver of innovation is using recently acquired technology, like Recothrom, for our products. Instead of using human thrombin, if you use Recothrom, you have faster prep products and less expensive products. In the middle of the slide, you have market expansion. We said under-penetrated therapies, right? We said a active method to stop the bleed are under-penetrated. The issue in this segment was there were no guidelines to guide the surgeons to use the right product for the right bleed. Now we have VIBe Scale. It's validated by FDA, by the way. Intraoperative bleeding scale that helps and drives the surgeon to use the right product for the right bleed, and that gives us opportunity in using more active sealants. We have adhesion prevention. We discussed about that. That is a big deal. Now we have the product, but we need to develop the market, the awareness of the hidden cost of this complication. Needless to say that we will continue to focus on geographic expansion, which is big. You will see in the next slide. We acquired a lot of molecules and products that now we are, you know, selling in more countries, and we will continue to focus on operational efficiencies. You remember the two drivers of the innovation, right? Expansion of the current product in new specialties and using, you know, a newly acquired technology for the current products. Here you see some of the innovation that we deliver and we are gonna deliver in the near future and in long term. You see in the recent launches, fast prep Floseal. What does it mean? Faster to be used in OR, which is great because we reduce the length of the surgery. You see two acquisitions, Seprafilm and PERCLOT, that were very strategic because with Seprafilm, we entered the adhesion prevention segment. With PERCLOT, we are gonna play in the powder segment, which is another important segment in the market. We entered two segments we were not really playing in with this strategic acquisition. In the near term, we have the Floseal with Recothrom. I told you, we bought Recothrom. Now we can use that technology in Floseal to make it less expensive for us to produce and faster to be prepared. We have also an example of connected care in OR. That is the Flow Coupler Monitor. That is a monitor to monitor the flow of blood in a vessel during the surgical procedure. Longer term, Hemopatch is very exciting. As well exciting is the Tisseel ready to use development. On the bottom, you see another element of the innovation, which is geographic expansion, which is big for this GBU. In conclusion, Advanced Surgery does not play in a mature market. We have big opportunity to outpace the growth of the market because we still serve under-penetrated segment versus the medical need. I share with you the excitement we have for the active sealants, for the adhesion prevention product that we have. The key driver of all of this is execution on market developments. It's education, it's raising the awareness, and it's doing that across the globe, so it's as well geographic expansion. When we do this, we are really confident we can grow this business over the LRP 4%-5% versus a WAMGR that is 3%-4%. Next time on the stage will be Steve, and he will update you on, you know, the next step in this very exciting GBU. Thank you for the time you have dedicated to Baxter, for your attention, and we will see each other again in the Q&A, I think, on the stage. Now we have the next GBU president. Thank you. Next, Front Line Care. Good morning. Great to see all of you here today. My name is Reaz Rasul, and I lead the Front Line Care business. As Joe had mentioned earlier today, I recently took over this business earlier this quarter. Previously, I was leading our Medication Delivery and Acute Therapies global businesses, which you'll hear more about a little bit later on today from my colleague, Heather Knight. Even with my recency in the Front Line Care business, I'm incredibly excited about all of the different innovations that we have in this space. Today, I plan to spend time with you to share why I believe this to be one of the most dynamic businesses in Baxter's portfolio. In Front Line Care, we group our businesses into three core categories: connected monitoring, intelligent diagnostics, and respiratory health. All three of these categories play across multiple sites of care, including the acute setting, like hospitals, primary care, think physicians' offices, and of course, the home setting. We develop products which allow us to improve care coordination, predict patient deterioration, and treat patients where they're the most comfortable, which is at home. You heard Jos é, Jay, and Giuseppe today talk about the continued digitization of the portfolio and connectivity. In Front Line Care, we have a broad suite of products which are in the connected care space, and we define connected care as devices or software that allow you to collect, communicate, or analyze data in order to transform healthcare. In fact, when we take a look at the Front Line Care connected products today, we have roughly half of our products that utilize some form of algorithms, predictive analytics, or artificial intelligence to support clinicians, caregivers, and patients. As you can see, with this broad portfolio of connected products, we have very strong capabilities to continue our growth trajectory. Next, I want to share with you a bit about the markets that we play in. Overall, we are participating in markets that are approximately $8 billion that are spread across four different segments. The aggregate CAGR of those segments is approximately 5%-6%, making them incredibly attractive for us to participate in. As we look at the end of the long-range plan period, we expect to be playing in a total addressable market that is approximately $9 billion. Now, as we take a look at our core categories of connected monitoring, intelligent diagnostics, and respiratory health, we see that we are not immune to the challenges and macro trends that the entire healthcare industry is facing that you've heard many of my colleagues already speak about today. We are seeing an acceleration of digital health, which is shifting care to more non-traditional delivery models. We additionally see continued global staffing shortages, including in specialty areas like cardiology and pulmonology. Lastly, there is the continuous pressure to have higher productivity as well as reduce the overall cost of care that's being delivered. Now, when you have all of these different kinds of challenges, it brings a host of opportunities, and we've put in place strategies that allow us to capitalize and solve these specific challenges faced by our customers. Very specifically, we are putting in platforms digitally that allow us to enable earlier diagnosis as well as support disease prevention, thereby reducing patient deterioration and readmission rates. Next, we are building a connected ecosystem of products to deliver on better patient outcomes as well as better clinical and operational efficiency for our customers. Finally, we are on the continued journey to simplify our technologies to enable a shift from more specialty settings to primary care settings, thereby reducing the cost of overall care that's been delivered. As you can see, we have very solid strategies in place to help us capitalize on these very attractive markets that we play in. Now I want to spend some time talking about our business. In 2021, our revenue was approximately $1.1 billion. We have a very balanced revenue profile in Front Line Care that is approximately 50% in the acute setting and 50% in the non-acute setting, like primary care and the home. As we look at this year in 2022, we are very excited and expect to deliver high single-digit growth for the balance of the year. What allows us to deliver that kind of growth? It's a leading portfolio. I'm going to touch on a few of the key elements here. I'll first begin with connected monitoring. In connected monitoring, we have a portfolio that spans from low acuity to mid acuity vital signs monitoring. In fact, Baxter is a global leader in multiparameter low acuity vital signs monitoring. In the mid acuity space, we are building on the innovations like our Connex vital signs monitor, enabling us to believe that we can monitor more patients, thereby allowing us to understand patient deterioration earlier. I'm gonna shift gears and go to respiratory health. In respiratory health, we have a portfolio that spans the home all the way to the acute setting. Specifically in the home, there's a couple of different products I'll highlight here, our Monarch Airway Clearance System as well as our Life 2000 Ventilation System. Both of these products are used by patients in the home to support them with respiratory disorders. I had the opportunity to speak with one of our product managers in respiratory health last week in Minneapolis, and he actually has cystic fibrosis and utilizes these products. It was incredible to get the insights from him around how these products have changed his quality of life, as well as insights on how we can continue to do more patient-centric innovations. We are continuously gathering information from patients like him and many others that we have in order to inject into our innovation pipeline. Another area that I'll highlight that differentiates Baxter in the home setting in respiratory health is our large patient support services organization. This organization allows us to train patients directly in their homes on our entire portfolio of home respiratory products. Now, as we take a look at the acute setting, we have leading innovations like our Volara and Synclara oscillating lung expansion systems. I'm gonna shift gears and now go to the consumables portion of our portfolio, which makes up roughly 1/3 of our revenues. In this space, we have tools that enable physical exams every day. Specifically, we have thermometry, in which Baxter is a global leader, as well as blood pressure devices, blood pressure consumables, and a host of women's health disposable products as well. All of these products are fundamental to physical exams that are being delivered around the world every day. Lastly, I'll touch on intelligent diagnostics. Intelligent diagnostics, we have three different sub-segments. We have diagnostic cardiology, which we've spoken about a little bit today already, as well as digital physical exam and our vision care portfolio. Going a bit deeper into diagnostic cardiology, as you know, we've completed the recent acquisitions of Bardy Diagnostics and Epiphany Healthcare. These two acquisitions, in addition to our existing portfolio, has now given us a robust suite of products that span from stress to resting ECG to long-term ECG testing. Now with Epiphany, we're able to collect all of the data from those different devices and utilize them for better and seamless communications with caregivers. As we think about the future in this space, we have the opportunity to take that collected data and have artificial intelligence run on it in order to be able to earlier predict patient issues in the cardiac space. We're very excited about our prospects in diagnostic cardiology and consider this to be one of our growth areas in the long-range plan. Next, I'll talk a bit about our physical exam portfolio. Here we have been on the journey to take once static physical tools and transform them into dynamic, smart tools for physical exam. A couple of examples of this are our recently launched products like the PanOptic ophthalmoscope, as well as the MacroView Plus otoscope. Both of these products enable a greater field of view, almost 20x greater than what we see in a manual product. They additionally allow you to capture the images and share them among clinicians, thereby enabling a more rapid and accurate diagnosis. Lastly, I'll touch on our vision care portfolio. Here we have two different products that I'll highlight. The first is a Spot Vision Screener. This is a product that we use for objective pediatric screening for early childhood visual disorders. The other product here is our RetinaVue 700. This product is the world's most advanced handheld fundus camera. This is a product that allows us to screen for diabetic retinopathy. In particular, the portability of this product has allowed us to take an exam that once was primarily happening in the specialty arenas and bring them into the primary care as well as the retail settings, thereby enabling much broader access. As we capture these images, we are able to send them to our RetinaVue Network so that they can be overread by ophthalmologists all across the country. As you can see, we have a strong digital thread that goes across our entire portfolio. As a result, I wanna share with you a bit more about that digital journey that we've been on. In 2021, approximately 40% of our revenue came from connected care products. This is almost 2x greater than what we saw in 2019. As we look at 2022, we have the opportunity to accelerate our growth in connected care by 2.5x that of our non-connected products, thereby enabling us to reach our aspirational targets of being north of 50% revenue during our LRP period for connected care products. As you can see, we've been making a marked shift from non-connected to connected. As I look across our three core categories of connected monitoring, intelligent diagnostics, and respiratory health, we have a host of solutions in the digital space. I now wanna take a quick moment and share with you a video that highlights some of these great innovations in our portfolio today. Digital technology and connectivity are changing the way healthcare is delivered. On the front line, our smart connected solutions give clinicians the insight they need to provide better and more personalized care. Here are just a few highlights from our portfolio. Building on a legacy of innovation that dates back more than 100 years, we are again delivering a new breakthrough by digitizing the physical exam. Our latest tools help enable earlier diagnosis and treatments by allowing clinicians to see more, capture and share images, and enhance consultations. A long-term ECG monitor, the Bardy CAM Patch, has been clinically proven to allow clinicians to take actions on arrhythmias that may be missed with other monitors. In a head-to-head clinical trial, patients prefer the CAM Patch compared to traditional halter. It can be applied at home or in the office. The RetinaVue care delivery model is helping to transform the standard of care by bringing the diabetic retinal exam closer to the patient. Now, a simple five-minute eye exam can be performed during routine primary care visits to help diagnose diabetic retinopathy, the leading cause of vision loss in working age adults. The Connex Spot Monitor allows clinicians to capture a full set of patient vitals and utilize automated early warning scores. These parameters help identify signs of patient deterioration. A single connected workflow helps to save valuable time and reduce errors. Connex Connectivity is linking our trusted airway clearance therapies to the new Connex app and health portal. This holistic health management tool helps clinicians and patients keep track of medications, airway clearance therapy data, and more, enabling better teamwork and decision-making for more individualized therapy. Frontline Care continues to innovate across care settings, furthering its vision of empowering clinicians to enhance outcomes for patients everywhere. We can't wait for you to see what's next. As you can see, we have an incredible foundation of connected care products that already exist in our portfolio. Now, earlier, we got a question around why we believe that we can outgrow the market by almost 300 basis points. Now I wanna actually share with you why I do believe that to be the case. It's around our strategy, which is broken into three different areas: innovation, market expansion, and operational efficiency. Innovation for us is the lifeblood of our business. We are continuing to invest organically as well as in external partnerships and inorganically. A great example of this from an external partnership standpoint is what we're doing with Digital Diagnostics. We are working with them in order to develop artificial intelligence in order to overread the images that we get from our RetinaVue camera, thereby enabling a diagnosis in minutes directly at point of care. Another innovation is in our respiratory health business. You heard me talk about patient-centric innovation. We are working on the next generation of mobile non-invasive ventilator, which also includes a portable oxygen concentrator. These kinds of innovations enable us to increase the ambulation for our patients, as well as give them more freedom of mobility, thereby improving quality of life. Next, I'll touch on our market expansion. We have opportunities with all of the different innovations that we're bringing to market to continue to generate clinical evidence to drive the adoption of these critical technologies and therapies. Additionally, when we think about geographic expansion, we have a multitude of offerings in our portfolio that we can leverage Baxter's large commercial footprint around the world to help us continue to accelerate that growth. One example here is our smart care device monitoring. We have the ability today to monitor devices in our customers' fleets and understand what the preventive maintenance cycle should be, as well as give them early warning signals to any operational issues that they may face. Lastly, I'll touch on what we're doing as a business in terms of operational efficiency. We are continuing to digitize the way we sell so that we can expand our reach to more customers in more locations in various geographies. Lastly, I've talked about diagnostic cardiology a bit. We have the opportunity to continue to build on our capabilities there commercially and expand our footprint in order to capitalize on the robust portfolio that we have today. With the successful execution of all of these strategic priorities, we expect to grow between 8% and 9% through our long-range horizon. This is 300 basis points above the current market CAGR. As I've touched on innovation, I wanna give you a bit of a deeper view here. We have 10 different innovations that are going to be coming to market over the course of our long range plan period. I'll highlight a few of the items in each phase. In recent launches, we've got our Connex Spot Monitor. Today, we now have the capability to add automated respiration rate, both for existing customers and for new customers. This is important because respiration rate is one of the leading indicators of patient deterioration. Having this in an automated fashion versus today, where it's calculated manually, ensures that we'll have more accuracy going forward and thereby delivering better patient care. Next, in the near term launches, we have our ELI 380 Epiphany workflow. This is taking our ELI 380 cardiology ECG product and connecting it with Epiphany. This allows us to have more seamless integrations in the electronic medical record space with our cardiology customers. Lastly, in the future launches, we are continuing to build in diagnostic cardiology. As you know, today, we have the ambulatory cardiac monitor with Bardy Diagnostics. We are building on that in the future with mobile cardiac telemetry to allow us to have a product which we can continuously monitor patients and provide near real-time diagnostics for arrhythmia and cardiac issues. As you can see, we have a robust pipeline of innovation, and we're very, very well positioned to continue our growth journey. In closing, I wanna leave you with three key points. First, we have an incredibly broad and strong portfolio of connected care devices today, and those devices participate in multiple sites of care. Second, given that we have the opportunity now with broader Baxter to leverage the large commercial footprint that exists, we expect to be able to take our devices all over the world in multiple markets around the globe. Lastly, we have an incredibly strong innovation pipeline that is going to allow us to continue to solve the fundamental problems that our customers face. All of these in concert will allow us to continue to outpace the market growth, and most importantly, it allows us to support Baxter's mission of saving and sustaining lives. Thank you very much for your time today, and I look forward to seeing you in the innovation hall a little later on. Next, Patient Support Systems and Global Surgical Solutions. Good morning. My name is Amy Dodrill, and I am the President of Patient Support Systems and Global Surgical Solutions. I'm so excited to be here today to walk you through how we are empowering caregivers by connecting every moment of care. You know, it's also so exciting to be a part of Baxter and expand on how we are going to transform healthcare via these connections. Before we get into that, I'd love to talk through what might be on your mind as an investor. I'm sure you're wondering, how are we going to grow in this ever-changing environment? Where is that growth gonna be coming from? And more specifically, how are we gonna be transforming healthcare within patient support systems and global surgical solutions? You know, I spend a tremendous amount of time out in the field talking to customers globally. We talk about what's happening in their day-to-day, what their future looks like, and ultimately, how our product portfolio is helping them focus on the patient and truly sustain and save lives. We'll also talk about, what are the biggest challenges? What are the gaps, and how can we bring and accelerate solutions to enable them to better serve those patients? What I wanna do today is I wanna talk through with you, number one, how are we gonna accelerate that growth and really drive those solutions to the customers? I'm so excited to be a part of Baxter and how by being a part of Baxter, it's truly gonna help us accelerate bringing those solutions to our customers. Lastly, how we're truly gonna be transforming healthcare. As I said, we empower caregivers by connecting every moment of care. The environment, you know, you heard this from James, you heard this from Jay. The environment that we're playing in is an ever-changing environment. It's one where customers are being faced with challenges that they've never experienced before and how they're able to serve and be in front of that patient and then also communicate to the family members. At Baxter, we're uniquely positioned because we're at the center of where that patient resides throughout that entire journey within the hospital. Between our smart beds, our stretchers, and our surgical tables, we hold that patient throughout that journey. Because those are all smart devices, as Giuseppe just indicated earlier, we are able to get unique insights that are coming off that patient, and then via our care communications platform, send information that is contextual, and it truly enables caregivers to treat and be in front of the patients in a way that they've never been able to before. If you look at this graphic here, the beauty of it is we follow them. If you think about transitioning from caregiver to caregiver, if you start in the emergency care, go to the surgical care, and then end up in critical care, that journey is with our patients and with our products throughout that path. It's very exciting to be a part and lead the way in that space. Let's talk a little bit about the market and how we are leading that way. We're playing in currently a $13 billion market, growing at a 6%-7%. Ultimately, it'll get to about $16 billion in the through the LRP. If you look at it at a more granular level, though, you've got Patient Support Systems growing at a low single-digit growth. What's so exciting about that space is I truly believe that it's under-penetrated. Now don't get me wrong, there are a tremendous number of hospital beds out on the market, but what they don't have is a tremendous number of connected or connectable frames out on the market. Meaning that smart device, that smart bed hasn't been out on the market, in the global market at the rate that we would like it to be, and we believe it will based upon what happened during the pandemic. We believe that's accelerated it. You go on to surgical. Surgical is more of a mid to single-digit growth, but it's the same. In fact, we believe that it's the least mature from a digital perspective. There are a tremendous amount of devices surrounding that patient. In fact, it's probably the most densely populated area in a hospital when you talk to devices. Imagine that environment, if you could actually connect them all. We believe that we can accelerate that growth using smart devices and a communication strategy. Of course, the most exciting is care communications at a 16%-18% growth. Without talking to customers, their two biggest challenges they talk about is understaffed, under-resourced, that the pandemic just exacerbated. The second one was the interoperability of all the devices and how challenging it is because they don't talk to each other. If you think about what care communications is, it that is what that brings to the table. It enables us to connect those devices. It enables us to really change the game of how a hospital and a caregiver can use the devices that really help keep that patient safe. Now let's talk a little bit about the product portfolio that we have today. You know, each one of these segments stands on its own, and we're at about a $2 billion to just under a $2 billion revenue number last year. What I'd like to do is take you on a journey on how important it is not to have these products individually, but how the connection of the products is truly where the difference comes. I want you to imagine a digital ecosystem where everything is connected, where a patient and a caregiver talk to each other in a completely different way, where a patient is lying on a smart bed with a surface that can help prevent falls or pressure injuries, that can detect incontinence real-time. The true game changer, as Giuseppe talked about, is contact-free, continuous monitoring, where we can monitor the respiratory rate and the heart rate, which are the two leading indicators of an adverse event. Now, if we take all those products and connect them to a technology that can analyze that data, that can then identify those risks earlier and communicate actionable insights to those caregivers at the moment in which that event occurs. That enables us to truly help increase patient safety, patient satisfaction, workflow efficiencies, and ultimately, if you think about that staff shortage, the under resourceful resources or even understanding that the tenure of the nurses and caregivers that are out there is not as robust as it used to be, it simplifies how they understand what they need to do at the right time for that patient. It's a really exciting environment to be in. That's what connected care is. It's not a single product that happens to be able to send data, and it's not analyzing the data. It's the combination of the product, the data, the analytics, and then ultimately the ability to communicate contextual information to caregivers to really change that experience, not only for the patient but for the caregiver as well. That is truly connected care. We are the only company out there that has this breadth of products when you combine them together that can deliver that kind of intervention and experience for your patients. Now let's talk a little bit about the strategy. You know, you ask the question about why we believe in the growth. We truly believe in the growth, right? All my colleagues will talk about innovation, market expansion and operational efficiency. You know, as Reaz says, innovation is paramount. Without innovation, we would become stagnant, and that growth rate would never be something we could realize. Our focus is right there on innovation. As I indicated already, we're deeply passionate about our caregivers and our patients and how we can bring innovation that can change that outcome and sustain and save that life. We're gonna continue to develop smart patient support devices that are giving us more information and data that allows analytics and insight that can truly change that overarching experience. We're also going to, as I indicated, that the other biggest challenge is interoperability. We're gonna work on how do we harmonize that. No matter whether it's a Baxter device or another device out there that would bring information or data that is pertinent for a caregiver to make a decision, we're gonna figure out how do we harmonize it, how do we bring it into our open architecture, and really change the dynamics of how devices are put in front of patients and caregivers. I'm gonna combine innovation and operational efficiency here. Now, this is a little bit different. We certainly are gonna drive the financial operational efficiencies that you heard from Jay within our business unit. Operational efficiency and innovation really come together as you become more of a software company. As you think about what you need to do and the number of iterations and the number of software launches you have to have to keep up with what's happening in technology, as well as the solutions that our caregivers and customers are asking for, you have to become very aggressive in what your cadence is and what you're doing with your software platforms. We have to be really efficient and drive that cadence to deliver upon what our customers need. Geographical expansion. You know, Hillrom, if you look at our revenue as a whole, it mainly came from the U.S. The beauty of the combination of Baxter, as you've heard multiple times today, is that Baxter has a much broader footprint, and it will enable us to take products that we have in the U.S. that are very valuable outside the U.S. into that space with a footprint and a team of very excited folks out into the market. It's incredibly exciting to think about how we're gonna take connected beds and then the Voalte platform, right? If you look at the global market, there really is not a strong connected story yet, and we believe that we can lead the way with the products that already exist. With a few enhancements, we can take it further. Very excited about all the innovations and all the market expansion that is truly gonna drive that 6%-7% growth that we've been talking about. Let's talk. Sorry, Alexa, if you don't mind, if we could please go to the video. All too often, healthcare gets complicated, and more and more the clinical side of care gets in the way of the human side of health. Care teams become overworked and understaffed, keeping them from being by their patients' sides. Communication unravels, bringing about clinical errors during critical moments. Care teams don't have time for that, and neither do patients. That's why at Baxter, we're redefining what it means to deliver care. Redefining a frustrating, fragmented experience and transforming it into one that is connected across the entire hospital. From the moment a patient enters the emergency room through the OR to the ICU, med-surg, and back home again, we are focused on revolutionizing connection. Connection doesn't just mean gathering data. It means connecting care teams with intelligent technology to reduce the burden, connecting care teams with each other for better communication and collaboration, and connecting care teams with their patients and patients' families to enhance compassionate care. Each moment matters. That's why we show up every day to empower caregivers by connecting every moment of care to save and sustain lives. Much like Reaz indicated, our business unit, just like Front Line Care, has over 40% of our revenue coming from connected care products. Also, we're gonna continue to see that revenue growth at over 2x our 2022 growth rates. Very exciting to see what that's going to bring to the table. Let's talk a little bit more about that video and what is it that we do that's so powerful and unique to the others out there. If you saw and noticed, there was a patient who started to get anxious, started to get nervous. Well, let's imagine that that's you, that's a family member, your mother, your father, a sister, brother. If we didn't have the solutions that we have today, that patient could have gotten up. They could have waited and been there alone in that room for some time. Because of the solutions we had, that particular patient was on a sepsis protocol. As soon as their heart rate started to go up or down, so the trending, depending on the trending and what that patient was looking for, our continuous contact-free continuous monitoring enabled us to notify that caregiver that something had changed and that they needed to address that patient's needs. Instead of that patient either being alone and nervous or getting up and possibly falling, that caregiver immediately knew what they needed to do, and that's via our Voalte mobile alert and alarm management, which you can see on that. A couple other things that were used is our Smart View via our Centrella. Centrella is where you have that contact-free continuous monitoring, but also you can see those lights that are coming off of that bed in the top picture. Those lights are indicators that tell you whether that patient is in a safe position. As an example, let's say at night, we're all familiar if you've ever been in a hospital, every two hours, someone walks into your room, has to check on you. In some cases, depending upon the situation, that's not necessary as long as you know that patient is safe and you know that their heart rate is good, their respiratory rate is good. What this product enables via those lights is for a caregiver not to have to walk in as often. It gives you a visible signal that that patient is safe. Another piece that was shown in that video is our Helion ORi, our OR integration. You know, historically, OR integration has been a video analytics or video monitoring or storage system. The reality of what our Helion system is, it changes the dynamics. It's not just about video. It's about how do you simplify bringing those devices in the OR in a way that is easy to use. One example outside of just managing the videos is actually using and bringing in DICOM diagnostic images into that environment, being able to manipulate them hands-free, as you saw in the video. You saw a hand coming down and manipulating that image. Instead of getting out of the sterile field, you can actually visualize and adjust and monitor those images in a way that you never have before. The other thing is, if you wanna consult with another physician anywhere around the world, it is a matter of actually making a phone call as long as that physician has the Anywhere App on their phone, where you could actually see those diagnostic images, and you could actually see those images from the real-time surgery. Game-changing in the environment. It doesn't require any additional equipment outside of that OR except for your mobile phone. It's a very exciting launch that we just recently had in the U.S. We were already having great success. Now let's talk a little about our innovation pipeline and where we're headed in the future. You know, smart devices are always gonna be a part of our world because it's incredibly important to be able to, number one, monitor that patient and have something that keeps them comfortable. As you can see here, we have a number of different products that are gonna be in our smart devices. I wanna talk about two of them. First, you know, Baxter has been an innovative company for decades, and actually has been transforming healthcare. If you think about it, we were the first, and we're still the only company that has a surgical table that synchronizes with a surgical robot. We're gonna continue to enhance that product. We're actually gonna take it to the next level. We're gonna make it future-proof, so as we have innovations in robotics, it can live on with that robotic solution. A customer won't have to change out the hardware, maybe some software, but it makes it future-proofed and just upgradable, which is really exciting. It's also gonna change a number of things from the surgeon in regards to easy access to the target area and being able to understand where the robot is in a different way than it does today. The second one that we're working on is our ICU platform. You know, our Progressa is leading in the market, but we're gonna take it to that next step, 'cause if you think about the burdens that we have on healthcare workers and turn assist, you know, the reality is our patients where you have skin that's at risk, you wanna be able to turn them every two hours. In the environment we're in, that's incredibly challenging. One of the products that we have here is turn assist, where you're able to actually do it with a single caregiver. Typically, it takes multiple caregivers. When you think about that burden, you think about the staff shortage, it really will help our caregivers in a better way to utilize the staff in the most efficient way while still focusing on that patient and ensuring that patient is very safe. Next one I'd like to talk about is our precision locating. Precision locating is a very unique product in that we use a technology called ultra-wideband, which is what really differentiates us from what's out on the market today. What it does is it really pinpoints into a sub-meter distance where something is. If you look at all the surveys that have been done, caregivers spend 30 minutes or even 20%-30% of their time on an hourly basis looking for things. If we are able to pinpoint where things are so that they can have the right equipment at the right time and not have to call around and figuring out where it is and what it is, they'll have the right equipment at that right moment, which is incredibly important, and we'll continue to drive that. Then lastly, I'm gonna talk about the virtual care. You know, virtual care is something that really focuses on not only the caregiver, but the patient and then the family. You know, the pandemic just made it very obvious that our need to do it differently and communicate differently with family members had to change because family members weren't allowed. They didn't know what was going on with their loved ones. What virtual care enables is it enables us to keep everybody informed about the progress via updates, via text, video, and a number of different ways. Now the anxiousness of a family member can go down. That experience for that patient can be much more positive. Let's think about those that are non-English speaking. It also enables translation. If you have a communication gap, what our solution will enable is that translation. We'll understand what's really happening with that patient that otherwise we might not have fully understood. Incredibly exciting where we're headed and what we're doing. Like, I'd like to even dive deeper on this next slide into what care communications is. You know, we've talked about connected care. Connected care, as Giuseppe said, is a full ecosystem. When you get down to what care communications is and where we're gonna be growing at a 16%-18% clip or even faster, is via our care communications. What is that? I want you to think of a rainforest, right? It's probably the Earth's oldest ecosystem, where each living item is vital to the well-being of the whole. Well, similarly, our care communications platform takes every device that it can integrate with, and via the open integration and architecture that we have, we can integrate with just about everybody if they're willing. Then take that analytics, and then you send it through this care communications platform. We leverage four different things in our care communications platform. Our nurse call, our Voalte mobile, our family and patient engagement, and then we take analytics. The analytics allow us to get the right information to the right person at the right time and in the right way. I think, Jos é was the one that highlighted how he was in an OR and everything was beeping around him. We wanna minimize that, right? Alarm fatigue is huge. If we know contextually what is needed and how to minimize those alarms, this solution can enable that. We're helping to automate workflows and simplify tasks. We are sustaining and saving lives with these solutions that we have today, and we're gonna continue to transform what those look like into the future. We're gonna help identify risks sooner. We're gonna allow clinicians to truly respond faster to ease that patient burden. We're gonna bridge those connections for caregivers to caregivers to patients, and then ultimately patients and caregivers to the family members. It truly is so powerful what if you have all of these capabilities, very few in the industry have. Our plan is to truly grow on this and expand upon it with the Baxter portfolio. In summary, we truly are empowering caregivers by connecting every moment of care. The world is changing around us, and we're gonna change with it. We're gonna break down the four walls of a hospital room. We're gonna break down the walls of a hospital and offering solutions that truly work in synergy and connect care across the entire hospital and beyond. As you can see and you've heard, when you add the broader Baxter portfolio, we are truly gonna change and sustain and save lives every day. Thank you. Next, pharmaceuticals and BioPharma solutions. Good morning. My name is Georges André-Vasseron, I'm the interim president for Baxter's pharmaceutical business. It's great to be here with all of you today. Thank you for your interest in Baxter, and thank you for being here this morning. You know, Baxter got into the pharmaceutical business back in 1948, and today we're recognized as a leader in pre-mix injectable drugs and inhaled anesthetics. As you know, we operate in the heavily competitive and very dynamic generic pharma market. Over the past few years, we've seen changes in the regulatory requirements, an increase in the number of competitive entrants coming into the space, and a higher demand for differentiated delivery systems. Our goal is to bring complex, differentiated products to the market that meet our customer needs and create greater value for Baxter and our shareholders. What I'd like to do this morning is give you an overview of who we are, the market segments in which we play, and then share with you the key dynamics in the market that are shaping it, and the strategic initiatives that we believe will lead to above average growth rates for our business over the next three years. Let's get started with who we are. We have an over 80+ year legacy in the pharma industry, and over that time, customers have come to trust Baxter for the quality and the reliability of the medications that are administered every day in hospitals around the world. Today, Baxter Pharma has unmatched expertise in pre-mixed injectables. We have over 30 premixes in proprietary Baxter IV containers. Our premixes are truly off-the-shelf, ready-to-use products that customers can use to save time and labor when administering medications. We believe that in this environment where staffing shortages are the norm, premixes can be a part of helping mitigate that risk. We are also a leader in inhaled anesthesia. As the inventor of Suprane, we have been pivotal in bringing inhaled anesthesia into the operating theater over the several years. Today, we have the broadest portfolio of inhaled anesthetic agents on the market, and our anesthesia is used in one out of every three surgeries every day. We're also a leader in IV drug compounding. We operate 20 compounding centers outside the United States that deliver on time very customized dosage products in IV containers to local markets. We see a trend in outsourcing of the IV drug compounding as another way hospitals can better manage their staffing shortages. Finally, we're also a company that has tremendous expertise in pharma manufacturing capacity and abilities, and we're leveraging those abilities to provide contract manufacturing services to the pharma industry. With a track record of quality and reliability, we're a trusted source as a pharma partner. Most recently, it's evidenced by the fact that we partnered with the pharma industry in the manufacturing of COVID vaccines. When you take our 80-plus year history, plus our commitment to quality, we're well-positioned to capture opportunities in the high value segments of the generic market space. Let's take a closer look at that market. The chart on the left, the bar chart, shows that we play in a $63 billion global market. We expect this market to grow at about 3% CAGR through 2025. As you can see, not all the segments grow at the same pace. Our specialty injectable segment, which is our largest, it's also one of the slowest growing ones, and there's two big drivers for that. First, the shift to oral therapies and biologics means that there's less new small molecules coming onto the market, coming off of patent and going generic. What that means, at the same time, we're also seeing an increased number of competitors coming into this space, including non-traditional players. When you combine more competitors chasing fewer products coming off patent, that generates an accelerating sales erosion and leads to slower growth. That's what we're seeing in the specialty injectables market. Now, the good news is there's still stable and accelerating demand for our premix injectables, which are considered differentiated type products. I'll talk with you in a little while about the strategy that we have to compete in this particular segment. Next, you can see in the inhaled anesthesia segment it's actually decreasing. Very similar commoditization and an increased number of competitors coming into this space as well as a shift towards regional injectable type anesthesia is now being more the norm. There's an added concern about the government, about the environmental effect that releasing anesthesia gas into the environment has. We believe there's an opportunity to bring innovation into that space and extend the life cycle of our products there. When you add to that the two service sectors, drug compounding and contract manufacturing, both were growing in the mid-single digit range and will continue to benefit from more outsourcing into these spaces. The combination in aggregate, our market is projected to be $69 billion growing at that 3% CAGR by 2025. How do we operate in this space? What does our portfolio look like in these product categories? Well, first of all, I think it's important to note that today we're a $3 billion globally diversified pharma company, and that's very different than the past. Historically, this business was very U.S.-centric and dependent on one or two products for growth, like Cyclophosphamide. Today, thanks to acquisitions, several licensing agreements, as well as our own development program and launches, we're much more diversified in our portfolio as well as in our geographies. That leads to a much more sustainable business that's less dependent on just one market or one product for growth. The $3 billion, you can see how it's broken up on the pie chart here. Our largest business category is specialty injectables, and it's where the biggest market dynamics have happened over the past few years. Let me touch on the other three first, and then I'll tell you a little bit more about what we're doing in specialty injectables. Let me start with inhaled anesthesia on the upper right. This is 13% of our business today, and it's part of that declining market segment. I talked about the fact that we've got a broad portfolio, and we will continue to offer that, as well as bring innovation on how they can administer gas more cost effectively. We provide training as well as vaporizer management to all of our customers, and that will continue as well. The big challenge now that's top of mind for many customers is the environmental effect of releasing anesthetic gas into the atmosphere. That's why we're proud to have partnered with ZeoSys Medical on their new innovative gas capture technology. ZeoSys Medical's gas capture technology prevents the gas from being released into the atmosphere, contains it, and then removes it off-site for safe disposal. We also believe that we can potentially recycle the gas in the future for reuse. Now, we're really proud of this, and we're looking to bring this innovation. We believe that innovating in this particular space not only will open up a new growth vector for us in this space, but will also allow to extend the life cycle of our three gases out there. We're really excited about promoting this in the upcoming summer congresses. We're already piloting it with several customers throughout Europe, and we fully expect to get ISO certification by the end of the summer. On the bottom left, you see our BioPharma Solutions business. This is actually our contract manufacturing organization. BioPharma Solutions has plants that serve the pharma industry as they move more and more towards outsourcing their manufacturing needs. Because of that, we've made an investment of over $100 million in our Halle, Germany, facility to increase the capacity of lyophilization as well as our prefilled syringe technology. Both of this to enable the expected growth that will continue in this particular segment. Finally, in drug compounding, I talked about the 20 compounding pharmacies that we own and operate, mainly in Canada, Western Europe, and Australia, New Zealand. These pharmacies buy the pharma product directly from the pharmaceutical company and do the mixing in a sterile environment into an IV chamber and then deliver it locally to the customers on a daily basis. We continue to see the trend here growing as hospitals look to offload the admixing from inside the hospital to third-party compounders. Now let me go a little bit deeper into the specialty injectables area. This is where we've seen the single biggest changes in our market over the last three years. I want to point you to the dotted line that you see here on the graph and that number of 138. That's 138 products that back in the 2018 investor conference, we had said we would launch by 2023. Now, 50% of those products were what we call standard or basic generics. Those are generics that are easy to copy, they're equivalent to the brand name product, and they're also easy to manufacture. Unfortunately, this is where we're also seeing the biggest increase in competitive new entrants, a lot of non-traditional players as well. Where we used to see maybe four competitors-five competitors coming in at market formation, today we're actually seeing 10, 12, and even 14 new competitors at the same time. What that does is created significantly lower market value for that particular segment of the generic business. Now, rather than us being competitor number 15, we decided to take a step back and re-look at our strategy here and our pipeline. We eliminated several of the low-value basic generics and have reshifted our focus to the more complex differentiated molecules where we have a competitive advantage. A complex generic is one that's usually an emulsion. It requires a special manufacturing process, and it's not as easy to copy. We've got a competitive advantage in that particular space. An example of that is Propofol, which is an emulsion, or Doxil, which is a liposomal product, right? A differentiated molecule is one that usually has a value add for the customer, similar to our ready-to-use or prefilled syringe technology. Our premixes would be a value-added, differentiated type of product. Now, the solid line that you see there is our new revised pipeline. As you can see, we'll still get to 100 products, but we'll do it later in the LRP. What we've done here is really shift the focus to more quality of our launches versus the quantity. Rather than going after a broad base of standard generics, we believe that focusing on the complex and differentiated products, we'll be able to outpace the growth of our segment by 2-3 percentage points. This is the single biggest change that we've made in our strategy since the 2018 investor conference. When we put all this together, what we have is our three strategic pillars. We're centered on innovation, market expansion, and operational efficiency, just like my colleagues here. Innovation is all about bringing to market those complex and differentiated molecules and bringing them into market in a timely fashion where we can capture the greatest value. We'll augment that selectively with some basic generics, where we can get to market quickly or where we have a competitive advantage. Market expansion is to continue building our portfolio outside the U.S. through geo expansion. A prime example of this is the investment that we made in Caelyx. Caelyx is a common chemotherapy drug that's used every day. It's well-known and widely prescribed, so it doesn't require a lot of clinical detailing. It fits very nicely into our commercial infrastructure, and because of that, we're using that as an anchor product to build our portfolio further. Finally, channel expansion. We do see opportunities for our premixes in alternate sites of care, particularly home infusion centers. When you're talking about ready-to-use, off-the-shelf products, those are perfect for these types of channels, and we see growth coming from that space as well as that trend continues. In operational efficiency, that's in everything we do. Our investments in capacity, our cost productivity programs at the drug compounding centers, and in execution of our pipeline with our new regulatory requirements. Finally, everything we do is with quality and meeting our regulatory requirements that supports patient safety, including fully supporting the lifting of the Ahmedabad FDA warning letter. By executing on this strategy, we firmly believe we can outpace growth of the overall market by one percentage point, 100 basis points. We believe it'll be about 4% CAGR through 2025. Now, you've heard me talk about the value of our products, and rather than me continue to talk about it, I prefer to show you. We've got a short video of one of our recent launches, Myxredlin human insulin for injection, and it'll, the video will speak for itself. Let's roll the video. Today, we'll be comparing the preparation of a manually admixture solution to that of a ready-to-use product like Myxredlin. Our patient on the right is receiving ready-to-use Myxredlin. Our ready-to-use medications are manufactured in sterile environments, come in flexible plastic containers and standardized concentrations, and are ready when patients need them. On the left side of the screen, a pharmacy technician is compounding or manually admixing insulin in the hospital pharmacy. Insulin is one of the top five drug classes involved with medication errors, and more than 30% of those errors results in patient harm. Before the technician starts compounding, they must gather several necessary supplies. Any mistakes could lead to lost time or, worse, a medication error. The technician has to perform over 10 discrete steps during the preparation to avoid errors while being very careful when working with needles, so they don't get an accidental stick. In this example step, the pharmacist not only examines the products used in compounding, but also reviews any required records sent by the technician to verify compounding accuracy and document the compounding process. Once the verifying pharmacist signs off on the completed dose, it must be hand-delivered to our patient. This process is repeated numerous times every hour in hospitals, and many admixtures are much more complicated, requiring more steps, supplies, and time than the one we demonstrated here. For the patient on the right, his infusion has been well underway while the patient on our left has had to wait. Finally, after the admix product has been prepared and delivered, it is ready to be infused. As you can see, our premix products bring real value not just to patients, but also to the caregivers, and that's why we've made it a central part of our strategy going forward and built it into our pipeline. Today, our new revised pipeline has over 80% of it tied to differentiated or complex formulations. Right now, we've got 15 new molecules in development under the differentiated drug delivery system, usually premixes, including an expected launch in the near term of premix Zosyn in the U.S., as well as insulin, IV insulin in the E.U. We've got an additional six molecules under development in complex formulations that are also including a near-term launch of Propofol in the United States. As I said before, we're gonna supplement that with some selective vials and basic generics that where we can get to market fast and capture value or where we have a unique competitive advantage. When we couple that with the investments that we're making in gas capture technology, as well as the investments that we're making to enable contract manufacturing growth, we feel very confident that we can deliver that above-market growth rate that we projected. What do I want you to take away from the pharmaceuticals business? I think the first message is this is a growth business, and that's a change from the past. In order to enable that growth, we're doing three things. We're increasing our innovation of complex and differentiated products. We're expanding the markets, and we're doing all that with operational efficiency. In order for us to be successful, we must launch these differentiated and complex molecules in a timely fashion to be able to capture the full value in the market and offset the erosion that we're seeing in the base business. We must expand our reach beyond the U.S. through geographic expansion, as well as continue to find productivity in our drug compounding centers for incremental growth and sustainability. We must continue to finish the investments in our contract manufacturing facilities, as well as our compounding centers to drive efficiency and profitability, and we do all of this always with quality and meeting our regulatory requirements with patient safety first. With this renewed focus in our pharma business, we feel very confident that we can not only deliver the above market growth rate that we stated, but we can also generate greater value for Baxter, for our shareholders, all while living our mission of saving and sustaining lives. Thank you very much for your attention, and have a great rest of your day. Next, Renal Care. Hello, everyone. I'm Lee Ann Schuette, and I lead the Renal Care business. I wanna thank everyone who's here in person, as well as those who are joining us online to learn more about the Renal Care growth strategy. The overall renal market has multiple factors that are driving growth, and as you've heard already today, primarily in home therapies, despite the recent challenges that have been created by COVID-19. Our strategy positions us to outpace market growth while enhancing profitability. I've been able to finally get out and travel and meet face-to-face with customers and our patients, I am more confident than ever that we are positioned to meet their changing needs now and into the future. My goal for our time together is that by the end, you share that confidence. I'm gonna talk about the market, how we participate today, our strategic priorities, and then close with really our vision for an even more compelling future. Before we dig in, I just wanna give you a quick snapshot of who we are. We are really proud of our legacy of innovation and leadership in renal care, and we're truly a global business, and that our revenues are almost equally balanced across each of our three geographic regions. We are the clear category leader in peritoneal dialysis, which is primarily delivered in the home, as well as hemodialysis, which is primarily delivered in a clinic or in a hospital setting. The other piece I'd like to highlight is that we continue to expand on our connected care ecosystem, which includes connected devices as well as the insights that we gather from our remote patient management platform. Now let's talk about the market. If you look at the bar chart, you can see that this is a significant market at $14 billion, forecasted to grow to $16 billion over the LRP. That 4% CAGR that you see is driven by factors like an aging population and increases in population with congestive heart failure and diabetes, which will increase the amount of patients that need dialysis. If you see in the center of those bar charts, peritoneal dialysis, which again is delivered in the home, is set to grow at 6%, which is double that of hemodialysis. There are really three factors that are driving that shift towards home. As we've talked about, COVID-19 certainly accelerated that. Clinicians work to move these immunocompromised patients to home where they could, where generally they were safer than being treated in the clinic or in a hospital setting. In addition to being immunocompromised, these patients typically have other comorbidities like congestive heart failure and diabetes, so they're in general more vulnerable to contracting and having more severe outcomes from these types of viral infections. The other piece that came with COVID-19 was the increased availability as well as adoption of telehealth and other connected care solutions, which made clinicians feel more comfortable treating patients at home, and it's also fueled the increased preference that we're seeing for patients to be treated at home. The last piece that I'd like to highlight is there are favorable policies that are being implemented by government agencies that are encouraging treatment in the home as well as encouraging innovation. I'm gonna share two examples from the U.S., and you would not be at a business meeting if I did not have acronyms. I have two for you. The first one is AAKHI, which stands for Advancing American Kidney Health Initiative. That has, as part of it, a mandatory payment model that impacts about a third of end-stage renal disease facilities as well as managing clinicians. They can receive either positive or negative payment adjustments based on their ability to increase home therapies as well as transplants within their Medicare population. Obviously, that's a significant driver for home therapies. The other acronym I have for you is TPNIES, and what that stands for is Transitional Add-on Payments for New and Innovative Equipment and Supplies. That does just what it sounds like. It really gives an additional reimbursement for products that demonstrate innovation and substantial clinical improvement. These factors are really setting us up for substantial growth in PD so that will grow to about a $4 billion+ actually forecasted by 2025 as a market. Now, we talked about this market has had its challenges in the near term with COVID-19 and primarily from the excess mortality within this fragile patient population. We are starting to see patient treatments stabilize and normalize, and anticipate that will continue over the course of this year, and then obviously the growth accelerating over the LRP. The key takeaway from this slide is there is a significant shift towards home therapies, where PD is the primary dialysis modality, where we are the clear category leader. We are uniquely positioned to lead this shift to home with our broad and differentiated portfolio, our geographic footprint, as well as our innovation pipeline. Now I'll talk to you about this market-leading portfolio that we have. If you see in the center of the slide, we delivered almost $4 billion in revenue last year, with most of that coming from PD. Let's talk about PD on the left-hand section of your slide. Again, we have different products and technologies that support this home therapy. You can see there we have PD cyclers. Our automated peritoneal dialysis cycler is really important because that enables patients to do their treatment at night while they sleep. Their daytime is free to work, care for family, or pursue whatever interests they would like. We also have solutions that are infused into the patient's peritoneal dialysis, which helps remove fluid, excess fluid and excess waste. Then along the bottom, you can see, and I'll talk more about, our Sharesource ecosystem of connected care. That consists of our remote patient management platform. We have now actually implemented that across 70 countries around the world. We support about more than actually 50,000 patients every year, and as you heard Giuseppe say, to date, we have managed more than 32 million treatments. We're excited that we are now this year launching 3 new digital health solutions that are listed here, and I'll talk more about, but it includes our analytics and decision-making as well as our patient mobile app and then finally, our Adequest prescription management solution. Our strategy in PD is really focused around increasing PD penetration as well as extending time on therapy, and we're gonna do that through innovation, market expansion, as well as the operational efficiencies that I'll talk about. Now let's shift to the right-hand side of the slide, and we'll talk about HD, which delivered almost $1 billion in revenue last year. You can see our portfolio of our monitoring devices as well as our dialyzers, which filter the blood. Our key strategy in HD is really around increasing the therapy penetration for extended hemodialysis. You heard Giuseppe talk about we have under-penetrated therapies. PD is certainly under-penetrated as well as our extended hemodialysis therapy, which is enabled by our premium and differentiated dialyzer, Theranova. We're also working to improve the overall profitability of the HD business. Just a quick note on Theranova. Remember I mentioned TPNIES, which was additional reimbursement that you can get for innovative products. We have resubmitted our application for TPNIES at the beginning of this year, and we anticipate a proposed ruling coming out in the July timeframe with the final rule coming out at the end of the year. Since our last application, we have submitted important new information that substantiates the clinical advantage that Theranova provides to patients as well as to customers. Our strategy will position us to deliver above-market growth of 4%-5%. Remember I said the CAGR of the market is 4%, so we're looking to beat that at 4%-5%. You've heard from my colleagues the three strategic pillars that we're focused on. I'm gonna just briefly give you an overview now on all three, but then I wanna spend a little bit more time on innovation as well as market expansion. From an innovation perspective, we are actually delivering innovations across both connected care as well as core therapies. From a connected care standpoint, you heard me talk about our existing remote patient management platform, but I'll show you how we're expanding that to include other connected digital technologies to further monitor those patients at home with really focus on delivering three things. One, improving patient outcomes, improving clinical workflow. We have the same nurse shortage in this space that you've heard my other colleagues talk about, and it's really challenging, so delivering clinical workflows is absolutely critical. Then the last piece is extending time on therapy so that patients can get the benefits of PD longer. That's our primary focus and what we're delivering with our connected care solutions. The other piece, while those are really exciting and we're all very excited about digital health, we also have a lot of opportunities to really enhance the standard of care, transform the patient and customer experience with our technologies in core therapies. One I'll mention briefly and then talk more about later is our new automated PD cycler that again is really designed to transform the patient and customer experience. For us, market development is really important, right? We talked about when you have under-penetrated therapies, investing in market development around awareness and education and policy, evidence generation, that's really important. Those efforts for us are focused on increasing PD therapy and increasing the expanded hemodialysis therapy I mentioned that is enabled by Theranova. Operational efficiencies. Obviously, we're all aware of the increased costs that our patients or our customers face and that we face, so we absolutely keep a focus on driving down the cost with efficiencies. I will note, though, we have made significant investments already to support the growth of PD so that we're ready, and we can serve our customers and our patients. Jim and his team have done a fantastic job in, as you heard him talk about, optimizing the supply as well as the manufacturing networks so that we're doing that as cost-effectively as possible. Now let's talk about innovation, my favorite thing to talk about. We'll first talk about it as it relates to connected care. Our ShareSource remote patient management platform that I mentioned to you, which is broadly used around the world, has a robust set of clinical evidence that demonstrates the value to customers and to patients. That makes customers choose us as their supplier and stay with us for their PD therapy because of all of the benefit that we're providing, with ShareSource being a key part of that. I wanted to just highlight two key pieces of supporting evidence around the value. One is a recently published study that showed, and Giuseppe mentioned it, that patients managed with ShareSource stay on therapy three point four months longer than those who aren't managed. Why that's important is there are significant benefits of PD versus HD. Giuseppe mentioned the quality of life, but they also have an early survival benefit, and they have a better bridge to transplantation. On average, with patients staying on two years-five years, three point four months extension is really meaningful. We're really excited to be able to share that out with the community. The other piece that's also critical is in a study, it showed that patients managed with Sharesource had 39% reduction in hospitalization and 54% reduction in hospital days. From a patient perspective, obviously, not being in the hospital is incredibly important for their quality of life, but the overall cost of the healthcare system is reduced by not having patients go into the highest site of care, which is the hospital. We're not stopping there. We are very busy expanding our connected care and monitoring ecosystem, and we're focused on delivering three things. First is moving from this reactive to more proactive and personalized care, making it easier to start and stay on PD. Then we've talked about the all-important increasing clinical operational efficiency. I mentioned we have three new digital health launches this year. I'm gonna highlight two, and hopefully you've visit us in the innovation hall, or you can come when we're done here today, and we'd love to be able to show you those in person. The first one I'll talk about is analytics. What that does is it provides the clinician with information on really three priority areas. First is around, is the patient adhering to their treatment prescription? Are they having any issues with their catheter which may you know, impact their treatment? Then finally, are there any alarms going on? Quickly that clinician can know which patients they need to reach out to to provide support. These three pieces of information are important 'cause those are typically the top three that lead to early patient dropout off of their therapy. Once that nurse knows they need to reach out to whichever specific patient, they get from us evidence-based clinical decision support that helps them with any of those potential issues. The other product that I want to highlight is our MyPD patient mobile app. What that does is it automates the collection of key vital signs like blood pressure, weight, glucose levels, and it does that through Bluetooth-enabled devices like our Hillrom Welch Allyn scales and blood pressure cuffs. It's important for clinicians to have this information in real-time accurate, you know, in real-time and accurate way so they can better monitor their patient while they're doing their treatment at home. Then the other thing I just wanna highlight on this slide is our PD TeleCare service. What that is for the first 90 days of therapy, which you can envision, you're a patient, you've just learned that you need to be on dialysis for an extended period of time until you get a transplant, you know, or for the rest of your life. That first 90 days is when they're just getting used to everything that's changing. That's typically when we see the highest dropout rate. We support clinicians and patients during that time with the insights from Sharesource, and we actually have just shared a poster at ASN last year, which one of the top five dialysis providers in the U.S. used that in over 20 clinics with over 200 patients and saw an almost 50% reduction in patient dropout. Really taking care of those patients in that first 90 days, we're really having an impact on how long they can enjoy the benefits of PD. The other part of our innovation strategy is around core therapies and how are we leveraging new therapy technologies to improve the standard of care. In all of the research that we do broadly and extensively with both patients as well as clinicians, we continually hear this needs to be simple. If you think about a patient, a typical dialysis patient, like my neighbor John, they're older, they have visual challenges, they may have dexterity challenges, so whatever therapy they're gonna do at home needs to be really simple. We've talked a lot about the nursing shortage, so whatever therapy a nurse has to learn and then train their patient has to be really simple. I'm really excited about our new automated PD global cycler platform, which is designed to really transform that customer and patient experience with its simplicity, as well as how we're expanding our ecosystem of connected care support. The other piece that we're adding there is remote service. We can use analytics to predict if there needs to be maintenance. We can, almost in real-time, send out software upgrades as we continue to make improvements and add new benefits to patients. As well as we can do remote troubleshooting if there is a problem, and we can do that super effectively. The other piece is if you look at if we've simplified the product, we've simplified the service, we're moving to one global platform. Thus we anticipate having a lower cost of therapy, which helps us bring the benefits of APD to more patients, so more patients around the world would have access to the benefits of that therapy. We also continue to stay focused on different technologies that would completely transform the standard of care, and we're focused on two areas. The first being at-home generation of PD solutions. As we talked about the growth of PD, being able to generate solutions in a patient's home gives us more flexibility and is more capital efficient than shipping them bags of solutions. We can also help transform the patient experience because they have to receive and store less products in their home. Many of you may be aware of our previous efforts in this space. We are leveraging the deep learnings from our previous efforts across research, development, as well as from the clinical trial that we executed. The last area of focus is artificial kidneys, kidney space, and technologies. Over the last five years-ten years, you've seen some of those technologies start to mature. We have made multiple bets in what we believe are the leading technologies in this space and position us to be a part of transforming care in this ever-evolving space. Our pipeline, we believe, will really help strengthen the leadership position that we have in PD. I talked about our three digital health products and services that we're launching this year. I also just want to spend a minute to talk about Claria, which we recently launched in the U.S., and we are actually continuing to exceed our expectations and receive fantastic customer feedback. This adds to our Amia Connected Cycler. Now customers and patients have two options to have connected care and receive that remote patient monitoring and all the other digital health products that we're gonna launch. As we think about digital health products moving forward, we're focused on moving towards that more predictive state as well as adding other monitoring and sensing solutions that will improve the monitoring of these patients in their home. Then lastly, I touched on the different new therapy technologies that will really transform the patient and customer experience as well as care and as well as enabling us to do that in a really cost-effective way. The last strategic priority I want to focus on is market development. Again, we talked about how PD is under-penetrated. As well as our extended hemodialysis enabled by Theranova. For us, this is a really important part of our strategy. We talked about policy, and we talked about AAKHI in the U.S., and we remain confident in the ability of that policy to drive increase in PD penetration and anticipate getting to 20%+ in the future of penetration in the U.S. The other countries you'll see setting goals for home therapy as well. The NHS in England has set a goal for 20% at home therapy, and we continue to see that momentum in other countries around the world. As that shift goes to home, we're focused on making sure education and training. Education that people are aware of the benefits of PD and then training. We talked about how important it is that these nurses have quick, easy training, and so we've made that digital, so it's available readily whenever they need it. Then the last piece from an education that I'd like to focus on is patient education. Studies show that when patients have education around their treatment choices and engage in shared decision-making with their clinician, they are up to 4x more likely to choose PD. We have executed digital patient education in over 40 countries around the world to help support them so that they can make the decision that best suits their needs. Lastly, I just want to highlight, I'm really proud of the fact that we have a newly launched corporate responsibility goal to double the number of PD patients in developing countries by 2030. In closing, our strategic priorities across innovation, market expansion, as well as operational efficiencies, really enable us to outpace market growth and drive towards a vision in the future, and a vision that includes personalized and proactive care through connected solutions. Patient and clinic experience is transformed by our new therapy technologies. Finally, that PD penetration and growth is catalyzed globally. We, as Baxter, as the clear category leader in PD with our large geographic footprint, our broad and differentiated portfolio of products, as well as the innovation pipeline that I talked to you about, are really poised to deliver on that vision. Thank you. Next, acute therapies, clinical nutrition, and medication delivery. I think I get to be the first to wish everyone a good afternoon. We've officially transitioned from the morning to the afternoon, but it is great to be here with all of you today in person, as well as those joining us remotely. I'm Heather Knight, and I recognize that I am the last presentation of the day. I hope that you've enjoyed hearing from my colleagues so far. I'm excited to be here to share the incredible momentum and the plans that we have in our Acute Therapies, our Clinical Nutrition, and our Medication Delivery businesses. They are three very unique businesses that are large, meaningful, and very dynamic in the marketplace that we play in. Last night, I had the chance to speak with many of you, and it was great to hear the things you're excited about, maybe you're curious about, the things maybe you're a little skeptical about and wanted to talk to me about. It was great to just spend that time with you. I want to share some of the exciting things that's happening across these three portfolios. You know more than anybody, the dynamic marketplace that we're playing in in healthcare and what the last two years have looked like. The industry has faced multiple challenges, many that you know and that we continue to face. There's also some bright spots that have come out of that. The pandemic has brought us closer than ever to our customers, and it's also energized and mobilized the entire Baxter organization when they realize the impact that we can have on healthcare. Since assuming this newly expanded role, it's not quite been one month, I have been poring over materials, learning about these three global businesses that, again, are large, meaningful, and dynamic. I've connected what I've heard in my daily conversations with customers, leading the commercial side of the business the last three years at Baxter, with my industry knowledge, spending about 30 years growing up in this industry. If there's one thing I can tell you and one thing that you take away from this presentation today, it's that these portfolios are set up to deliver what our customers value most. What I wanna cover today is the market dynamics that we're seeing, what we're experiencing in the industry, and our plans, not just to meet, but exceed our LRP commitments. Specifically, as you've heard from my colleagues, our focus on innovation, market expansion, and operational efficiency will allow us to deliver on those commitments. You guys ready to get started? I'll start with who we are. We are a mission-driven organization above all else. Everything that we do focuses on saving and sustaining lives. You've heard that theme throughout the day today. We touch 75 million patients with our products every year. That's a huge number. We are inventors. We are often the first to deliver new therapies to customers and patients across the globe. We are recognized as a market leader with our products being sold, you heard from José, in nearly 100 countries across the globe. We are innovators, and you'll hear a lot more about our acceleration in that area today. It is the foundation of everything that we're doing today and transforming at Baxter. Let's talk a little bit about the markets that we play in. I'll start at the top of the page with Acute Therapies. There is significant opportunity in Acute Therapies, and that business is expected to grow in the mid-single digits to $1.5 billion by 2025. Working in our favor are some of the market dynamics that we're seeing. Just increased awareness of blood purification therapies, as well as sustained demand for these products, and increasing numbers of patients globally being treated with these therapies, but still highly under-penetrated. In the middle is Clinical Nutrition. That is expected to grow in the low single digits to $4.2 billion by 2025. We have seen growing recognition through the pandemic and awareness of parenteral nutrition and its therapies, with the treated number of patients increasing during various stages throughout the pandemic. You heard a lot about the continued shift in the markets. That's another important factor in Clinical Nutrition, more and more patients being treated in the home, as well as alternate sites of care. At the bottom is Medication Delivery. It's a large dynamic business comprised of three primary categories. The first is IV therapies and reconstitution. That is expected to grow in the low single digits to a whopping $17.2 billion by 2025. Infusion systems, and we'll be talking a lot about that today, is about a $6.6 billion category that's expected to remain relatively flat by 2025. Hemodynamic monitoring is one of the growth areas of the portfolio and expected to grow low double digits to approximately $900 million by 2025. As you've heard from my colleagues, in this portfolio, in particular, the focus on digital health, connectivity, and personalized therapies is especially prevalent when you look at medication delivery. As we've talked about, this business is not immune to the challenges that we've seen facing the market, including hospital admission variability and the ebbs and flows of COVID as it's impacted our global markets, resource and labor shortages, as well as global supply chain issues that James and his team have been just such integral partners for us as we've maneuvered through that period. Despite this, we expect to see overall market growth of about $1.5 billion across these categories. Our focus on innovation, market expansion, and operational efficiency, and delivering what our customers value most will allow us to capture the lion's share of this market opportunity. I now wanna take a little bit of a deeper dive into Baxter's business across these three categories. Acute Therapies today for Baxter is about an $800 million business. This portfolio includes our monitors, our sets, and our solutions. We help simplify the delivery of continuous renal replacement therapy or CRRT, as well as our organ support therapies. This business, you know, being new somewhat to it, is a real success story for Baxter. It has grown significantly the last few years, and since we were last together with you in 2018, this business has nearly doubled. Today, I wanna highlight some of the plans that we have to continue growing this business, as well as the innovation that we're focused on in organ support therapies, which helps support improved patient outcomes. In clinical nutrition here at the bottom of the slide, that's about a $1 billion business today for Baxter. We offer a comprehensive portfolio of parenteral nutrition offerings that includes advanced nutrition compounding solutions, systems, and technologies. When you look at the portfolio, our products are innovative, but they are also very accessible, and that plays a key role in driving clinical outcomes in the care setting where care is delivered. They're also providing the necessary convenience for our customers. So we've talked a lot about staffing shortages, tightening of staffing, and when we see that globally, the convenience is a really important factor that our customers are considering versus compounding themselves. So I'm also going to share more with you today about our next generation automated compounding solution that we're launching this year, and hopefully some of you got to see that during the innovation hall. Last is medication delivery. That's about a $2.9 billion business for Baxter and includes three categories we talked about earlier. Our infusion systems, IV access, and sets portfolio is used for fluid delivery, nutrition, chemotherapy, antibiotics, blood products, just to name a few. You'll hear more about how we're continuing to evolve that business as well as our infusion pump platform, not only with technology, but you've heard the importance of data and data sharing and generating insights for clinicians so they can personalize care at the point of care. Our IV therapies and reconstitution portfolio includes IVs, irrigation, as well as drug reconstitution products. We remain focused on growing this business through continued geographic expansion as well as building a sustainable, resilient supply. We want to provide our customers the product that they want when they want it. Finally, our hemodynamic monitoring portfolio. This includes the Starling fluid management monitoring system, as well as sensors and clinical decision support tools that you heard Giuseppe talk a little bit about earlier. That's for non-invasive specialized monitoring and a really important part of our fluid management strategy. Now I want to transition to talk about each of these businesses individually, and I'm going to start with Acute Therapies. When you look at our business in Acute Therapies, we are a globally recognized leader in CRRT, and we are elevating our leadership in this portfolio by innovating around blood purification therapies as well as advanced filtration technologies. I would be remiss if I was on this stage today and I did not talk about how this team mobilized to service our customers throughout the COVID-19 pandemic, although some may argue that we're still in that. I'm so proud of how not just my team, but the entire organization mobilized to serve our customers and serve our patients for the critical demand that we saw for CRRT. We've invested in capacity expansion in CRRT solutions to serve our patients, as well as obtained four U.S. emergency use authorizations to further provide demand and supply to our customers throughout the pandemic. I'd like to now talk a little bit just about the strategy in acute therapy. You've seen this slide a lot of times today. I'm sure many of you are familiar with it. I want to start with innovation because leading in connected care is a critical part of our approach in CRRT. Having a connected portfolio that can generate the clinical insights that our customers are asking for in real time to help them solve the challenges that they're facing in treating the sickest and most complex patients that are in the hospital. One example of this is our TrueVue Therapy Management System. TrueVue is a valuable program that we launched with our PrisMax 2. What this program does is we have Baxter specialists that actually go into the hospital and they evaluate the data from our devices, the CRRT therapy data, and they partner with them to uncover key insights. Working with those clinical teams, they're able to figure out how to optimize their care quality programs, how to maximize the resource utilization in important areas like the ICU, as well as help them deliver on their clinical goals. This is especially important, again, when we see resource constraints in a critical area of the hospital like the ICU. When staff is tightened, we're seeing greater pull for this improvement area with our platform. When you look at advancing our core therapies, that means elevating our market leadership in CRRT while expanding the treatment possibilities for next generation blood purification, which I'll talk more about in a moment. In the area of market expansion, this is a highly under-penetrated therapy, so market expansion is critical to what we're doing in Acute Therapies. We're using registry data to drive additional insights and adoption of our products and the life-sustaining organ support therapies that we have. One example would be our OxirisNet registry data, which tracks the treatment data of patients with multiple organ dysfunction who have undergone extracorporeal blood purification. That's a tongue twister there. We're also focused on delivering high-value clinical training and education. Why is that important? That's important because research has shown us that education on CRRT is critical for driving, prescribing, and adoption of the therapy. Without that, it leads to therapy downtime and a further lack of prescribing. We have the BCCI, our Baxter Critical Care Institute, that offers on-demand training resources for clinicians online, easily accessible where they need it most. We're able to share our expertise, best practices, and help them drive further adoption of the therapy. In the area of operational efficiency, there's a lot that we're doing across the portfolio, but the one area we're really focused on is ongoing capacity expansion projects, primarily across the Americas and Asia-Pacific, to meet these large increases in demand that we're seeing for our products. James Borzi and his team have been instrumental in doing this, and I'm happy to report that capacity is online today, and we're seeing significant relief in the market. Executing on these strategic pillars will allow us to continue our strong momentum across this portfolio and deliver above-market growth of 7%-8% by 2025. I want to take a moment just to provide a little bit of a glimpse into the future state of Acute Therapies. When we look at innovation, we've already launched our PrisMax 2 portfolio in multiple global markets, and that was the result of years of collaboration with our customers. We're seeing a lot of great feedback from them already on the launch of that system. If you're familiar with PrisMax 2, and were able to see that in the innovation room, you saw our PrismaLung+ that was included, and that's our blood gas exchanger for patients that require extracorporeal blood purification for removal of carbon dioxide. That's important because it removes the excess CO2 from the bloodstream and is critical to managing acute respiratory dysfunction. Another area of critical significance that we saw throughout the pandemic was also around removing these inflammatory mediators from patients, or cytotoxins, endotoxins, and cytokines. Both are found in the bloodstream of patients with COVID or conditions like sepsis, and we're focused on making sure that we're there to address these critical conditions for our customers. One of the ways we're doing this is partnering with companies like Spectral Medical, I think you're aware of, to help advance sepsis care through our exclusive distribution agreement in the U.S. and Canada for the PMX sepsis filter and sepsis diagnostic. That helps us assess the patients at risk in the ICU for progression of this disease of severe sepsis. When you look forward, you look at PrisMax-III. That is our new and improved citrate-based ecosystem for optimal delivery of CRRT therapy. Our intention with this whole platform is to generate more predictive analytics, as well as use artificial intelligence and continue to use that across our capital platforms to further optimize and improve patient care. Just to go a little bit deeper on that, we see a very bright future in acute therapies. Today, we're a market leader that's focused on improving patient outcomes. As a market leader, it's our responsibility and obligation to continue to define and grow and shape the market. We're doing that in a few ways. First, we're continuing to grow in CRRT while expanding the treatment possibilities with next-generation blood purification. We're also focused on generating those necessary insights that our customers are asking for with greater precision. That includes enhancing their decision-making at the point of care and supporting the treatment approaches when they have, again, the sickest, most complex patients in the hospital. That leads to more personalized care and individual patient therapy that can be prescribed. Finally, we've made a number of small equity investments in early-stage companies that are doing exciting things to advance therapies and further elevate patient care and deliver more to our customers because that's what they're asking for. This is just a snapshot of how our innovations in Acute Therapies are delivering what our customers value most. To personalize therapy for patients, to provide ease of use for clinicians, make things simpler for us, and focus on additional therapies to address the comorbidities in critical areas of the hospital like the ICU. I'll now shift to Clinical Nutrition. When you look at our portfolio, we offer a comprehensive portfolio in Clinical Nutrition of PN solutions as well as devices. We are a global leader in PN compounding. When you look at the systems and technologies, you might not know this, but over the past 25 years, we have compounded more than 100 million bags with our ExactaMix compounders in over 1,000 pharmacies across the globe. We are also the originator of the ready-to-use multi-chamber PN bag, and we are the only company in the world that has a ready-to-use three-chamber bag for neonates as well as pediatrics. When you look at the strategy for Clinical Nutrition, in innovation, our opportunities are pretty clear. We are broadening our portfolio by investing in our foundational platforms, including multi-chamber bags and our compounding systems, as well as digital health. These innovations would help us do a few things. It will help us strengthen our already strong market leading position. It will help us penetrate more deeply into existing customer accounts, and it will enable us to compete more robustly across the globe with a meaningful offering that will differentiate us from our competitors. We're also working very closely with the pharmacy to connect into the EMR and make sure that we can solve for any gaps that show themselves for patient assessment as well as treatment and monitoring. This includes not just in the hospital, but also the home. That is a critical ask to make sure that we can do what we're doing in the hospital in the home setting as well. In market expansion, we're expanding into near adjacencies when you look at Clinical Nutrition, including pediatrics, as well as underserved patient populations like oncology or intra-dialytic parenteral nutrition or IDPN. We're expanding into adjacent channels, and that includes the home and alternate sites of care. We'll be leveraging and working with our Hillrom colleagues very, very closely on that. We're also very focused on EMEA, where we're seeing a huge disparity in terms of certain markets where the access to home therapy is more diminished. When you look at geographic expansion, we have more than 40 geographic expansion projects already underway in Clinical Nutrition, primarily across attractive developing markets. These projects will help strengthen not just our local commercial execution, but also help expand our treatment to more patients across the globe. Finally, in operational efficiency, we've identified several portfolio synergies that will allow us to reduce not just our internal costs, but also free up capacity for high-value products and reduce complexity across our portfolio. We've taken numerous steps to improve our supply chain, increase redundancy, and validate our third-party relationships with suppliers, giving us further confidence that we can deliver on our commitments over the long-range plan and continue to execute on our strategy for PN therapy. In Clinical Nutrition, executing on these strategies will allow us to drive above-market growth of 4%-5% by 2025. When you look at the pipeline, we're developing foundational innovations across the portfolio that will help transform PN therapy and strengthen our product leadership across the portfolio, not just for today, but for decades to come. Our goal is to develop sophisticated solutions for our customers across the portfolio that not just benefit them, but also the patients that receive them across the care continuum, in the hospital, in the home, in the alternate site settings. Our strategy comes to life, you can see down this page, in three areas. One is formulation innovation. That's launching new micronutrient combinations that serve adult and pediatric patient populations, as well as launching exciting new compounding ingredients that help improve pharmacy efficiency. We've also identified several next-generation products and molecules that are in the early stages of development. In the area of preparation and delivery, we have clear strategies to strengthen our market-leading position in both automated compounding as well as in multi-chamber bags. These platform innovations will enable growth and innovations like our ExactaMix Pro, which I'll share with you in a moment, which is our new-to-world platform for compounding. We're also launching a new-to-world compounding platform that is ready to use that allows our customers and patients to receive a compounded dose that is standard, easy to use, and delivered in a premixed container. When you look at our digital ecosystem in Clinical Nutrition, that's how our devices are connected, not just to the caregiver, but also to the patient. We're developing new connected care modules in the pharmacy, the hospital, and the home that allow us to bring better workflows, EMR integration, and a better remote patient monitoring experience. When you look at ExactaMix Pro, we continue to expand our presence with a strong portfolio and this very exciting pipeline. Case in point is the launch of this new platform, ExactaMix Pro. That's our new next-generation platform for automated compounding, and it moves us away from a dated Windows-based system to a new platform with a new programming approach, enabling better use of resources, better cybersecurity, increased reliability, and increased workflow efficiency. Part of that is a new command center that we're launching with the product that incorporates new design enhancements, including more processing speed, more power, stronger data reporting capabilities, as well as a new user interface that will simplify very common, very pharmacy tasks. This is also designed for serviceability, which will greatly reduce the need for on-site Baxter resources and increase the uptime or reduce downtime for our customers. We're preparing for controlled launches in both the U.S. as well as Canada, with full commercial launches in North America and Europe starting later this year. I'd like to share a preview of the video that highlights ExactaMix Pro. Please roll the video. Now you know why it's an exciting time in Clinical Nutrition. Last but certainly not least, I'll be talking about Medication Delivery. When you think about Medication Delivery at Baxter, we bring more than 90 years of expertise in delivery of IV therapies. When you think about this business, this is a cornerstone of Baxter and was our first business when the company was founded in 1931, and I learned from Jay here in Glenview, Illinois. We are globally recognized leaders in the delivery and safe preparation of medication. Going forward, we're building on this expertise to develop new ways of personalizing IV therapy with clinical data. I said earlier, this is an important part of this franchise. When you look at innovation and medication delivery, delivering a digital first and connected portfolio is essential. Connectivity is a crucial component of every program and every product that we're developing. With connectivity, we could harness the power of our infusion data, and that's something our customers have been asking us for, to make sure that we can deliver to them actionable insights and help ensure that patients remain at the center of care at all times. It's also important to save nursing time and clinician time, again, with the staffing shortages that we're facing. When you think about enhancing our medication safety software offerings with advanced drug libraries, that's a really important part of AI in advancing that platform. Our DoseIQ safety software, which is a program with Novum IQ, is a customizable drug library platform and dose error reduction system. It enhances infusion safety by creating one of the highest drug library compliances in the industry. When you look at advancing our core therapies, we're developing hemodynamic monitoring and that business overall to inform those high-value clinical scenarios that are regarding fluid management and further complementing Baxter's therapeutic devices in departments like the ICU to give patients the very, very best chance of recovery. In market expansion, we're spending time educating clinicians on how to best optimize fluid management. You heard that from Giuseppe earlier today. One of those programs is our Equilibria program and the use of Starling. We wanna make sure that we can help deliver strong clinical outcomes by helping our clinicians deliver the right fluid to the right patient at the right time, which helps reduce patient complications and further offers strong economic benefits to our hospitals. We're also pursuing in this portfolio targeted geographic expansion of our IV therapies. One example would be MINI-BAG Plus and launching that in different configurations across new markets across the globe to drive the standard of care at the point of care. You heard from James earlier, in operational efficiency, manufacturing products in the markets where they're sold is an essential part of our strategy here at Baxter, and we're strategically adding to our own supply redundancy across geographies. One recent example would be moving our production of products like MINI-BAG Plus to the mainland U.S., which has been another critical ask of our customers, especially in markets like the U.S. Highly focused on margin expansion. When you look at margin expansion in Medication Delivery, we're focused on things like price increases, cost reduction, portfolio mix, and of course, volume growth across the business. When you look at these three strategies, executing on these strategies will allow us to deliver above-market growth of 3%-4% by 2025. When you look at the pipeline across medication delivery, our pipeline includes three categories, infusion systems, IV therapies and reconstitution, as well as hemodynamic monitoring. In infusion systems, you may be familiar with Evo IQ. So Evo IQ is the platform that we launched outside the U.S. to help our customers meet a specific patient need. Over the past few years, we've seen great success in markets like Australia, the U.K., Ireland, Colombia, and Mexico, to name a few. You're also very familiar with Spectrum IQ, which is our proven platform primarily in the U.S. and Canada. That offers a very intuitive user experience and has really been a strong growth engine for the organization over the last couple of years. As you know, we're looking forward to the launch of Novum IQ in the U.S. upon receiving FDA approval. Now, we can't speak on behalf of the FDA, but I remain very, very confident in this platform because of the feedback we've gotten from our customers, because of the feedback our customers have given us into design of this platform, and because our customers in Canada are already enjoying this platform today, and we're getting great feedback. I'm very, very excited. While it's been a long road, I'm optimistic as ever about the launch of Novum IQ. For IV therapies and reconstitution, we're investing in expanding critical areas of the portfolio like Mini-Bag Plus, which as I said earlier, is delivering standard of care at the point of care. Our customers desire, they really want strong workflow efficiency and doing more at-the-bed and in-the-floor admixing of our products and drugs. In hemodynamic monitoring here at the bottom, I'll just touch on that for a moment. We're bringing Starling to new global markets across the Americas, EMEA, as well as Asia-Pacific, and launching new digital tools to help support its adoption and use. One of the areas that Giuseppe talked about earlier, which I think shows great promise and our customers are very, very excited about, is integrating these platforms, integrating Starling and PrisMax 2 and Novum IQ, and the potential that these platforms have to work in tandem to deliver better patient outcomes and enable patient care in the hospital. This will be a game changer for Baxter, and as Giuseppe said, we already have funding underway to start to connect many of these devices. When you look at the future with Novum IQ and our innovation spotlight, yes, we're first and foremost focused on getting Novum IQ to market. This infusion platform is so essential because we're known today in the market for our ease of use, our patient safety, as well as our cutting-edge clinical safety software. The Novum IQ builds further on our reputation in this space by combining our expertise in infusion therapy, as well as marrying that with innovative digital health solutions and tools like IQ Enterprise for EMR integration or Dose IQ for drug safety software and reducing never events. For DeviceVue, which is for asset tracking to better utilize the pump fleet, all things that our customers have been asking us for. Moving forward, we're not just stopping with the launch of an LVP and a syringe. We're focused on launching a PCA as well as an ambulatory pump to give us a full platform and suite and enable better workflow across the hospital, improve the insights that we can give to customers, and enable better patient care. That's what this is about. This plan comes together when you look at all of this in a few ways. When we look at the opportunities to integrate infusion pumps into other platforms, including Voalte, you saw that in a couple of presentations today from Legacy Hillrom. Why we're so excited about this is it allows us to collect and analyze patient data and provide that insight in real time. It also shows great promise with better alarm management and helping enable caregivers to make decisions on how they manage patient alarms, which is a huge problem, an annoyance, an alarm desensitization that we hear about every day, especially, again, amidst these staff shortages. We will continue to advance this platform and IQ Enterprise, including, you know, an infusion dashboard that our customers can see real-time, the status and data of their pump fleet, better utilizing their resources and driving increased efficiency across the hospital. Those real-time insights are gonna be essential for our customers to make sure that we're increasing efficiency. We're also really excited about the use of predictive analytics and AI to generate those insights and be able to go back and analyze the data and provide our customers insights, the government insights about things that are happening across the universe, multi-systems. They can't see that data today, and they're not utilizing it. They're also asking for support on how do we reduce medication errors or never events across our system? We'll have the capability to do that. We've also designed Novum IQ to be 95% field serviceable. That may not seem like a big deal, but to not have to deploy resources and further the uptime of that pump fleet, as well as make sure that we're providing updates over the air, those are game changers in the industry, and they will significantly differentiate Novum IQ as it comes to market in the U.S. Again, we're already seeing the benefits in markets in Canada. I'd like to show some of the highlights of Novum IQ before I conclude, and not only why we're excited, but why our customers are excited for this launch to take place here in markets like the U.S.. You can cue the video. To conclude, I wanna share it's a really exciting time at Baxter, and I hope you appreciate after my presentation and all of my colleagues, that we are well-positioned to deliver growth over the long-range plan. Specifically, I wanna reiterate that Acute Therapies, Clinical Nutrition, and Medication Delivery are ready to deliver what our customers value most. For Acute Therapies, that means personalizing therapy for patients and facilitating greater ease of use for clinicians. For Clinical Nutrition, that means enhanced reliability and efficiency in improving clinical outcomes. In medication delivery, it's about enabling better workflow efficiency as well as improving patient insights with data and further enhancing patient safety. We are experiencing incredible momentum in the business and very focused on delivering on our commitments in innovation, market expansion, as well as operational efficiency. Execution on these strategies should allow us to deliver market growth across all three businesses. I want to thank all of you for your time today and listening to our strategy, our presentations. I also would like to take a moment on behalf of this entire leadership team and thank our employees across the globe for their energy, their passion, and their commitment to delivering on our mission to save and sustain lives every day in and day out. I also want to make sure that our customers and clinicians, if they're listening today, that they know that we appreciate them, and we thank you for your ongoing partnership and your trust. We're leaving today energized. I hope you are, too, about the future of Baxter. I'd like to now bring Clare up to the stage, and we'll go right to Q&A. Thank you. Thanks, everyone. I know it's been a long morning that has now stretched into the afternoon, so appreciate everyone for sticking around. We wanted to make sure we did allocate some time for your questions. Apologize that we've gone a little over, but wanna make sure we get all your questions, and we have some online as well and give our leaders the opportunity to address some of these questions. They will also be available after the Q&A session ends. The innovation hub will still be open for those that can attend that and see the innovation that we're going to be bringing to the market in the next several years. With that, we'll see if there's any questions in the audience. Vijay, I saw you first. Vijay Kumar from Evercore. Thanks for taking my question. Maybe one for... You know, I'm not sure who the right person is, but if I go back to the last analyst day when you guys had the WAMGRs in market growths and Baxter's outlooks on the segments, clearly the macro change, pharma came in below. When you look at the 4%-5% LRP across your segments, do you feel like there are areas where either that could surprise us to the upside or downside? Where do you see or feel like there's the most potential for volatility or variability? Yeah. I I will start. Okay? If you go back to the presentation, there are areas that are growing much more than 5%. Care communication is growing 16%-18%, okay? Then you have connected monitoring, intelligent diagnostic. They are growing high- or mid-single-digit, but more than 5%. PD is growing 6%. All these franchises will accelerate the WAMGR that we have seen so far. The pharma is the other side, right, of the picture, where we have seen a deceleration in the market growth. Now, what is interesting is there are franchises like smart beds, and we are seeing the market is growing 1%-2%. The smart bed penetration outside of U.S. is very small. In Europe, we're speaking about 15%. There is a big potential there as upside to the WAMGR. I don't know if anyone wants to chime in. I'd like to just add. I think our WAMGR, because the 3%-4%, you will have some opportunity and some upside and downside. It will depend. We need to watch the pharmaceutical market as a more complex market. I think some of the opportunities have been mentioned. I think we estimated pretty well where we are in terms of WAMGR. If we go back to 2018, the mix is not the same, but the two outliers would be the decrease of patients in PD, they will pick up, and the pharmaceuticals market. Those are the two major changes for us in markets. I think we'll get a pretty good estimate as is, and we're putting a challenge out there, which is to grow up to 100 basis points above the WAMGR. Maybe one on renal and acute. I saw the PD penetration was 20%. We had the AAKHI initiative. That seems to imply a 100 basis points increase in penetration annually. That's what your model is assuming. I'm curious why AAKHI is not a bigger deal. On the pump side, I know you're hesitant to comment on the FDA's you know timing of approval. What seems to perhaps be the hold up, or is this just procedural, or maybe give some color on the timing? Lee Ann, do you want to start? Sure, yeah. Thank you for the question. AAKHI, you know, as I talked about, from the mandatory payment model, right, that's applied to about a third of the ESRD. You know, facilities and clinicians. Really, the first measurement period happened last year. This year, towards the end of the year, we'll start to see the financial impact. We've started to see, if you look at our customer base, we have about a 1/3 of our patients and customers who are in that kind of payment model piece, and we are seeing that growth higher than those who aren't. We're starting to see that. You know, as we talked about, ESRD patients were much more impacted with COVID-19. I think that trend and the impact of AAKHI was slowed a bit, but we're starting to see that is growing and anticipate that that will continue. If you look at from kind of going 12% now to then to 20%, that really is a significant impact. We're really anticipating as the payments start to impact, you know, how that can accelerate. Again, COVID is still with us and so unpredictable, and this is a very fragile community that's highly impacted by that. You know, that's the other piece that we always have to make sure we keep our eyes on. On the pump side, again, we can't comment on behalf of the FDA, but we're collaborating very closely with them and working to move swiftly to bring this to approval. Clare, I don't know if we've commented on that yet, externally on timing. We just said we'll respond to the FDA by the end of the year. Right. That will be. That's still the plan. Robert Marcus, JP Morgan. Just one question from me. You did a great job giving an overview of all the segments. There were a couple where the market growth rates ticked down a little bit from the last Analyst Day, acute therapies, medication delivery, surgery, nutrition. Just maybe if you could give a very quick, you know, connect the dots from what happened, how much is COVID and current conditions, and just fill in why it slowed down a little bit. You want to start on the Medication Delivery? Yeah. I can start with medication delivery. In 2018, when we presented that, I don't think some of the online capacity coming in was probably fully contemplated, so that's something that we're watching. Yeah, a little bit of the hangover of COVID-19 that we're seeing. We saw a huge robustness of utilization and use, so trying to just normalize that over the LRP with what we expect to see across our global markets, not just the U.S., but that's a global growth rate as well. On the advanced surgery side, I think we expect by the end of the year to be at pre-COVID level and then grow 2%-3% till 2025 in terms of surgical procedure, which is kind of aligned to what we saw earlier. I think for the nutrition market, that also just has to deal with some of the geographic elements, particularly within China, where we've seen the China market come down significantly as a result of value-based procurement within that market. That is not a significant market for us. Again, this is a global market, and so that's really that. The other piece is obviously the pharmaceuticals market, which we've addressed, really just increased competition and pricing within that market as well. Drew Ranieri, go- We're gonna go with Drew over there. Hi. Drew Ranieri, Morgan Stanley. For Amy, just a couple questions on hospital beds and surgical tables. But just with the robotic surgical table update, is that to imply that you're going to be agnostic for whatever robotic competitor comes down the road, in terms of your future development? And then two, with Centrella, the smart, your smart bed, maybe can you remind us what penetration of the bed is today in the U.S.? And then with Voalte, just what's kind of the overlap of your Voalte accounts with Centrella? 'Cause I think that was kind of one of the key drivers of Hillrom's growth in connected care. So just maybe what is it of a beachhead today, and how big of an opportunity is that to expand? Yeah. First starting with the surgical question specific to robotics. Our surgical table is still very much an exclusive with Intuitive, and we continue to anticipate that to stay true. There are no other robotic offerings out on the market today. We anticipate Intuitive to continue their development along with our development. That would hit on the surgical piece. When you think about penetration in the U.S., you know, if you look at connected versus connectable and then advanced connectivity, and if you go specific to Centrella, but it could be Centrella or it could be our med-surg beds or our ICU beds, there's what I call connectivity and then advanced connectivity. I think from a connectivity perspective, and I'm gonna get to your penetration piece here, but connectivity, we're pretty robust. Now, advanced connectivity, when you start combining it with Voalte solutions, et cetera, that's where there's a tremendous opportunity, and we only have a small share of that in connecting Centrella to a Voalte. Whereas, you know, if you think about that 16%-18% growth, we actually think we can do better than that, because of our Centrella market share and how when you have that better together story, we can really optimize what's happening with our caregivers and our patients and that combination of technology. Great. Thanks. Then just as a follow-up, maybe this is for Jay, but I think back in September when you announced the deal, you talked about 100 basis points-150 basis points of pricing headwinds baked into the standalone plan. So just as you're looking at the current LRP, how are you kinda thinking about that today, especially as some of the commentary across the presenters today was talking about recurring revenue sources and maybe being a little bit more sticky? Thank you. Sure. As far as price goes, we really don't get into too much details in terms of specific areas or pockets. We have seen pricing pressure in the pharmaceuticals business. We anticipate that to continue. We've modeled that accurately, at least as far as, you know, as best as we can at this point. As we look forward and across the portfolio, you know, there are pockets of opportunity in terms of price increases. We'll look at those and work carefully with our customers to make sure we're respecting and capturing the value of what we provide in the price that we charge. So there's some opportunity there in this LRP, I would say. Outside of the pharmaceuticals area, there's probably a little bit of opportunity included in the long range plan that we've put together. I don't know if the folks on the stage would add. Yeah. Just to add a little bit to that. I think in general, inclusive of pharmaceuticals and also some pricing pressure we're seeing in our Asia Pac region, we are seeing pricing as somewhat of a negative impact over this time period, not as much as what you were referring to before, Drew. Given a lot of the initiatives that Jay has talked about, where we are looking for opportunities where we can implement some pricing actions. There's Jayson. A couple quick questions on Medication Delivery. I guess first, are you still planning on filing the syringe pump in Q2? And then second, it looked like your goals imply 200 basis points of share gain. You have a pretty dominant share in solutions, so I'm guessing that the share gains stem from pumps or hemodynamic monitoring. Just a little bit of flavor on kinda the source of share gains over the LRP. Yeah. Thanks for the question. We are anticipating some share gains, but we've also worked very closely with our customers the last two years to solidify our agreements over the term. We had contemplated some share erosion in the past, so we feel like we've secured that and ensured our book of business. We are also anticipating some share gains in infusion pumps. There is a large volume of infusion pumps coming up for renewal over the next five years. With the launch of Novum, we anticipate taking some share. We still do expect to submit the syringe pump in the Q2. Yes. Q2 is on track. We're on track with that. Are there any more questions in the room? Okay. Vijay, one more, and then I'm gonna move to the online quickly. Jay, this one perhaps for you. I think you mentioned oil price of $70. Maybe talk about the sensitivity to oil price movements in the model, what it means to our bottom line. Yeah. $10 of oil price. Yeah, you talk. Represents a $25 million impact. Basically we've assumed a sort of linear progression from roughly where we are today to an end state of roughly $70. We've done some work with some macro advisors and concluded that that's a reasonable spot for us to land. Could there be upside or downside to that? There certainly could be. But you know we're watching that very carefully and I think at this point you know it's a prudent assumption. I would add that we need to watch very closely what is happening to this dislocation of volume in with the Russian oil, because if that is absorbed in other geographies in a longer period of time, will be probably no anticipated huge spike in price. If it is not, if it's blocked from being deployed, then you have less supply of oil for the world, and then the price is gonna go up. This is our assumptions are based on a dislocation more naturally happening than a blockade that would prevent them from prevent Europe from absorbing oil. James, is that correct? Okay. Thank you. This one's for Lee Ann, Lee Ann, what did you learn from the Home PD Solution study, and what are the next steps with respect to that? Perfect. Yeah. Previous efforts within the Home PD solution generation were really around kind of the technology, right? How can you create that to ensure the safety where we talk so much about this patient safety and quality. There are technical pieces that we learned. The other piece was we worked really closely with the FDA, and so learned a lot from a regulatory perspective, just kind of insights and questions. Then the final thing that I would highlight is we did get to a clinical trial, and so learning from that sort of in-home patient experience and learning from that. I think for us, it's really about, we talk so much about the cost pressure. One, safety first, making sure from a technical perspective, we can get through regulatory approval, as well as just making sure that it's a cost-effective solution because this is a significant patient population, so making sure that it's affordable and cost-effective. Again, we leverage learnings from the research, the development, as well as the clinical trial. The next steps, I think was the other piece, is we're continuing to advance, to reach to, you know, concepts that we have. We continue to engage early to get feedback from regulatory bodies to make sure that we are thinking about everything that they would be concerned about. Great. Thank you. This one for Heather. Heather, on your slide, you mentioned that you expect the infusion systems market growth to be flat over the long-range plan period. Can you address why it's flat? And also, where you are with some of the supply constraints on Spectrum IQ. Have you been able to resolve any of those? Yeah. On Spectrum IQ, I'll start there. We've been able to actually try to secure additional products working with, Jim's team, electromechanical parts that are needed for Spectrum, but we're still constrained. You know, hand to mouth was the term that was used earlier, but we're working very closely with our customers to try to get them the pumps that they need. It's important to note that demand is still very strong for Spectrum IQ, so we're working closely with our suppliers and integrated supply chain, to make sure that we can address that. Then the first part of the question. The infusion systems market growth rate being practically flat. Oh, yeah. The market being flat. When you look at infusion pumps, they're good for 8-10 years when you look at the cycle of a pump. We look at it based on when the pumps are going to be coming up for renewal. You could say roughly a tenth of the market comes available every year. It doesn't really necessarily expand. We also had a number of customers who bought access during the pandemic. That's really why we say that the market is flat. Thank you. Just two more here. Lee Ann, can you comment at all on the additional studies or additional information that you submitted to CMS for Theranova? Yeah. We basically did a retrospective analysis to look at all of the additional clinical information that had been generated since our last submission. One thing that I would highlight there is a recent study that shows that patients treated with Theranova had a 35% reduction in cardiac events, so a significant improvement there. We've also reached out to you know, we've been using Theranova in the U.S. for the last year and a half, so we have testimonials from patients and/or clinicians around the value of that. I think adding to the clinical data as well as sharing how this is impacting clinicians as well as customers, because that's obviously a key piece, is showing the substantial clinical benefit. Great. Thank you. Lee Ann Schuette, this last one is for you as well. How are you thinking about value-based procurement for peritoneal dialysis in China? Yeah. There's been a lot more activity in value-based procurement in China. What the first thing is our local team has been working very closely with the Chinese government to help them understand, and hopefully, you do too. It's a therapy. You know, it's different than if you have a pharmaceutical and you take a pill and you try and make sure that you do negotiations around reducing price in that space. There's a lot that needs to go into supporting delivery of PD patients. Having them think about it more as a therapy. I think the other piece that we've been doing is more of the volume-based procurement are in some more non-differentiated types of products. We've been focused on bringing our differentiated portfolio to China. In the Q1 of this year, we were able to bring our Extraneal product. What that is, it's a non-glucose-based product that has real clinical benefit over standard types of PD solutions. That's one. We also, in the beginning of last year, submitted for Theranova approval in China. I think, you know, one, helping them understand how we're different from some of the other products that they have within the scope of volume-based procurement, but as well, making sure we're bringing our differentiated portfolio. Great. Thank you, everyone. I wanna thank everyone for joining us here today, those here in person and those on the webcast. It's really been our pleasure to share the story of our ongoing transformation, and we hope you are as excited as we are. On behalf of the leadership team and all of my 60,000 Baxter colleagues worldwide, we thank you as always for your confidence and your support in Baxter. Now, there is lunch available for those that are here in person, and the innovation hall is open as well. Thank you very much and thank you to all our presenters here today as well.