Presentation of the morning. Welcome up next, Baxter International. We are lucky to have Andrew Hider, President and CEO. It's our first time having a fireside chat, so thanks for coming. Kevin Moran, VP of Investor Relations. I think you wanted to start out with the legal stuff, Kevin. Yeah, thanks, Travis. Just a reminder, we will be making forward-looking statements today. For more information, please consult our IR website or our SEC filings. Back to you. Great. Thanks, Andrew. You know, maybe starting out, you know, like your initial time at Baxter, I think you talked about changing the culture to, you know, one that's more accountable. You know, maybe just kinda talk about what kind of changes you've made so far and, you know, where you're at in the process. Great. Good morning, everyone. Look, I came to Baxter with a belief around where we sit in the markets, the engagement with our customers, and the ability to get back in line with execution. You know, if I do a step back, that's only that my view on the business has continued to evolve, but the thesis around where we sit with our customers, our progress on performance, ultimately where we're taking this has been in line. I would just say, early on in my journey, we started Baxter GPS, its Growth and Performance System. The reason we did was that it's an alignment to the critical few metrics that we're gonna hold at the highest level, we call them value creators. By the way, there are eight of them. They never change. Every business, every site, every division has those eight: revenue, margin, free cash flow, ROIC, top four financial, on-time delivery and quality from a customer perspective, internal fill rate, and turnover from an employee perspective. The reason why that's important is as we've gone to a more decentralized organization, I don't like secret decoder rings as a CEO. I wanna go on-site, and I wanna know in three seconds, where do we need to focus and spend our time? To the culture question, we've moved the needle. Now, we're early in that journey, and I wanna be very clear on culture takes time, but I've been really encouraged by the engagement of the team around what that looks like. Proof points, Q1, we did 231 GPS events. 231. No single event is going to be a silver bullet. I'm here to tell you, it's a series of events that continue to change over time, but we've made progress. Additionally, w e've restructured the business to be very focused on our end markets, what we call decentralized management. To be, you know, to think about it cleanly, it's we put the power in the P&L in the business unit to drive effective change for our customers and ultimately our shareholders. The last piece is I'm a big say-do ratio person. What we say, we gotta do. Q1, I'm pleased with the progress. We have a lot of work to do, but we've made progress. I would say we, Baxter, need to continue to build that focus on execution and then alignment to high say-do ratio. Moving, a lot of work to get done between now and when I would say we're at our high point of execution, but it's moving in the right direction. You've broken down the turnaround in kinda multiple phases. Phase I, holding people accountable. Maybe what's in phase II, and when does phase II start? When are you gonna move from phase I to phase II? You know, one of the when you look at a continuous improvement culture, one of the questions I get often is, do you have the team? I would say everyone wants to do continuous improvement until you have to do it. That's gonna evolve over time. We've made significant progress. We've delayered the organization. We put the power in the business units, and we're starting to execute. One of the next phases, and I've been very clear around this, is getting our leverage under three. The reason why that's so critically important is it allows us to press the other areas of capital allocation. If you join my team, you get two books, and one is The Outsiders. The reason I want you to have that in your back pocket is because I want you to know how I think about investment, how we think about investment, how we look at operationalizing our business, and how we expect execution. When we achieve under 3x, it allows us to open up that ability to execute from a capital allocation for long-term shareholder value. That will be part of the narrative for the future. The Q1 obviously beat. Is that part of the accountability already showing up in a better execution right away? Is it too early to say? Look, we have a lot of work to do, right? First half, second half, I walked through why we're confident in second half. Again, I'm pleased with the progress. More work to do throughout the year. Proof points, GPS events, training and engagement. We started the first week in January. We did a President's Kaizen event. There was 10 events, big impact events. I did it. My senior staff were involved in Kaizen events. The reason that matters for culture, it shows nobody's above continuous improvement. Everyone here has a stake in ownership around that. The other proof point that I would say we're pleased with the progress, not there, but pleased with the progress, is our free cash flow. We've made progress there. We're going to continue to laser focus on how we drive free cash flow in the business. It's not where we want it to be, but we have seen improvement. More work to do. As you've kind of evaluated the portfolio, you know, is this the right mix of businesses for Baxter? How do you think about the quality of the different businesses? There's obviously the team and culture things, but there's also the businesses and the markets that you compete in. I'll answer this in a few ways. First, Baxter's gone through a lot of portfolio shift, and that's largely behind us. I would say, sure, there's some TSA next year, but I would say large part with the kidney care business being spun out of Vantive, that's now behind us. When I talk about stabilizing, that's part of the equation for stabilizing. Number two, we faced some headwinds in 2025 that I would say we had to call. One of them was IV solutions. When I talk about IV solutions, we initially had the perspective that it was going to come back at a shorter period of time. I'm here to tell you, we made that call. It's, we're not talking fluid conservation, it's the new norm. We've now right-sized the business for that. We would expect that business in the future to get back to low single-digit growth. What you're going to see in the future for Baxter is there's going to be three major categories that we're going to put our businesses in. There's going to be invest and grow, areas we know we can drive and continue to outpace the market. There's going to be sustain, which is how we look at those businesses for cash generation. We look at them on investment to return at a higher level of expectation. They're the fuelers. There's going to be fixed and or divested. I would say you're going to find lower in that threshold, but we are going to look at businesses we need to fix and be laser focused on it. I would say our portfolio is good. We're going to continue to listen to customers. We've done a lot of work around the markets we serve. We've done a lot of insight around where we play in the value chain for our customers. But at no moment is that going to be kind of defining our future, meaning our portfolio will evolve, but we like our position today. And we have a lot of optionality for the future, but we need to execute on our plan. Any sense for or color which businesses kind of fall into those different categories? Yeah, I'm careful on this. I would say, you know, we're not outlining that externally right now, but just to give it a couple examples. Advanced Surgery would be one we'd put in the invest and grow. There's a lot of options to drive that good, strong position. As a matter of fact, I'm meeting a couple customers tomorrow. As standard work as a CEO is I meet with customers, and I'm on-site at our facilities. Really seeing it firsthand, the impact that we have with that product set, the strong value we have with our customers, the technology and power we have in the product, allows us to put it in that category. You know, just to give you an example of what would be in the sustain, we want to sustain our position, our strong share position in our IV solutions and really drive that business and make sure that that continues to remain very relevant because our customers rely on Baxter to provide a high-valued solution, where we make it easy for them on their workflow. We've also outlined our pharma business to be closer with our ITT business. We now have it as combined because it's very similar selling process, high-value capability, high patient impact, and makes it easier for the customer around the workflow. You're going to start to see that evolve over time, and we're going to be very open around what that looks like. You talked about pushing down P&L responsibility. Well, how deep in the organization is that going? Is it changing incentives and bonus structures, or how are you making those changes? A couple things I'm going to walk through, and I'm just going to hit, you know, how we think about it from a cultural perspective, where it sits in the business. What I start with, if this team were to travel with me to the facility I'm going to tomorrow and Friday, what you would see is we start with the value creators. As you walk through the facility, you're going to see how we measure that daily, weekly, quarterly, monthly, and on an annual basis, and the targets we set around how we drive it. That's early in its journey, but the team is taking this head on around red or green, not pink, purple, or yellow, red or green. If you're red, it's okay, but it's not okay not to do something about it. When you're red, it means action. What do you do to drive root cause, countermeasure, and what's the target to get back on track? Why that matters to me as a leader is 'cause then when I go on-site, I understand, are you taking the critical actions? Because remember, businesses are going to be faced with many different variables along the way. It's are you training your leaders to drive action in them? That's what we're looking at. Number two, around our position and how we think through how we drive our businesses. The leaders with P&L have that overall accountability, so they own the P&L, but they drive it very deep in their business. I would say our bonus structure was good, but where we missed, I'll just say it cleanly, we were low percentage in how we held people accountable to objectives and then what that looks like on impact. We have driven that at the top all the way down to full organization. It's a much higher percentage. Close to 100% of our team is now objectives are aligned with the performance that we expect on the business, and the teams are accountable to those numbers and driving those numbers. That went into place January 1st? Went into place January? I w ould say over Q1. It As you recall, right, you go through strategy, you go through goal deployment, which is our X matrix around where you're gonna stretch the business to drive and outpace, and then AOP, and then that trickles down into what we expect from your supervisor to a manager, to If you're in engineering, how are you launching products, expanding your ability with customers and driving that for value creation? We're being very focused on what that looks like. Where are we with the CFO search and, like, what kind of attributes are you looking for? Look, you know, I said it on the call, it's a desirable job. I would say we're fortunate that we have a strong finance organization and Anita Zielinski has stepped in as the interim, she's our Chief Accounting Officer. She understands the nuts and bolts of the business. So comfortable on where we sit. We're looking for an operationally focused CFO. When we think about the business, it's about how do we maximize our performance, then longer term, what do we do with that cash? That's the capital allocation piece. Getting somebody on that understands who Baxter is, knows where we sit, and then also the ability to align the business around execution and performance is somebody who we're looking for. Wanna touch on kind of the macro inflation, you know, what you're seeing on, you know, the cost pressures that are coming in from the macro standpoint. You know, I'm not gonna reiterate the call we had, but we reconfirmed our full year guidance on our Q1 call. What gave us the ability to do that? First, I talked a little bit about the oil impact and how we view it today versus where we were in the past. To give you clarity, when we had our kidney care business, it was a higher level of exposure. It's roughly half or less now. It's less exposure on that from a standpoint of oil impact. I even said on the call that if it stayed flat to where it is today, we view that we're able to manage that. Number two, being proactive in how we really manage our supply base and how we drive our supply base to minimize any type of disruption on, you know, increasing costs, et cetera. We have driven that from a proactive approach. The last piece is, you know, just to lay it, we went through a cost structure change. Part of that was two items. First, we delayered the business, we have outlined that, and that's part of the first half, second half equation. Number two, we took action on our IV solutions business. We had carried a cost that was a burden cost. Never easy, but we realigned it to the new norm of the business, and we expect that to flow through in our inventory in the second half of the year. Comfortable where it sits today, but we are not immune, and I want to be very clear on that. It's about how do we take proactive approach, how do we drive our business, but we're not immune. We often look at how do we potentially offset something that could come down, and we're constantly looking at what are the areas that we might be challenged on and take action. What are the areas to kind of watch out for? Is it mostly oil resins and shipping costs, or is there anything on computer chips or other areas that maybe we should be watching? Yeah, I walked through a little bit around like the chip aspect, and I would say, it has not been a big impact on us today. We're being very close and intentional on that. Oil, we watch and we do look at that from a resin perspective, but I did walk through what that looks like. I would say we continue to monitor the global impact, and tariffs obviously being one of them, that we monitor to make sure that we're positioning the business to continue to drive to what we signed up for. What other, maybe cost savings programs or offsets do you have in the business if things do get worse to offset some of it? I would say we call it PPV, purchase price variance. We're being much more proactive on that. I would say the team understands what that looks like. Oh, by the way, part of that is also hitting free cash flow because we expect also payment terms to be something we view with our supply base. We're also looking at how do we look at levers within efficiency in the business, and we hold ourselves, and we call them our improvement process internal. We look at automation for that. We look at efficiencies on labor with that. We look at how we go to market on that. All those areas. Then there is some element of price that we look at as well. I would say, you know, Baxter has gotten better. We're not perfect, but we've gotten better from where we were in the past. There is an element of if our costs go up, we have the ability to go back in the discussion. It takes time. As you're well aware, last year we had about 100 basis point of price in our, in our number from last year. We are looking at that for the future because we offer a high value for our customers, and that constant driver on value and value creation. That's why innovation is also a key element in our future. Base hit innovation, where being in front of customer, listening and launching solutions that really enable them to do their process better and be more effective on care for patient. We're very aligned with what that looks like. A clear example of that is the Dynamo Stretcher. Very proud of that launch. A lot of excitement around it. We've seen a tremendous, you know, feedback from our customers in a positive way. It's a connected stretcher and it's about that listening and launching solutions that offer higher value for our customer base. On margins, first half to second half is a 500 basis point step up. I think a lot of people are looking at that and seeing, like, how is that possible? Can you just help us bridge that gap? Maybe I'll let you start, and then. Sure I'll add in the high level. Sure. We tried to put out a fair amount of color on the call, kind of helping people understand and process what those buckets were. Call it 500 basis points from what we said about first half and kind of imply to the midpoint of our guidance. About half that is simply an improvement in volumes and capturing an appropriate level of leverage associated with that. And that frankly has not been the case recently here. Kind of getting back to that more normal leverage that we would expect. The other two areas, one would be realizing the benefits from the cost structure actions that Andrew discussed. Those were mostly taken in January. Those are gonna be realized. Just have to see them flow through the P&L. The third piece is cycling through the higher cost inventory or the absorption headwind that exists in the first half. It was around a $20 million impact in Q1. It's probably gonna be closer to $50 million impact in Q2. Importantly, as we exit the first half, we think that will be behind us. Again, it's a very mechanical thing. We're just gonna sell through the inventory that was produced at the end of last year before we took those cost actions. These are the three biggest areas. Obviously not all-encompassing. You know, we've talked about inflation. I think importantly there, you know, based on the cap and roll and where we sit today, that would only be a, you know, a month or two impact for the full year. As we took a step back, looked at all the risks and opportunities for the year, felt comfortable that that was a manageable risk in the context of everything in totality. Yeah, and look, I don't have much to add. Kevin laid that out appropriately. I mean, if you look at it, right, 50% is, and like you said, typical market for our business and for the IVs, it's just math. It's how it's gonna roll through. So yeah, of course, we're gonna continue to face areas that we're gonna drive in the business and there's a lot of wood to chop between first half and second half. What we do view that we are very comfortable with reiterating our guidance for the year and what that looks like and how we're executing towards it. You've also kind of talked about 2027. You said ability to grow revenue and EPS both. You've been saying that for a few months. What's given you the confidence to kind of say that a year in advance? What are some of the risks to that? Couple items. First, I wanna be very clear about something. Our path to 2027 is through our ability to execute in 2026. I wanna be crystal clear on it's how we execute throughout the year, and of course, there's a lot of dynamics between now and next year. I'm not here to go through what that could look like because we're gonna be faced with different challenges throughout the year that we're gonna take head on. As we look at next year, our typical, you know, market growth is low single digits. We would expect it to be that in next year. Through that, as we look at how to drive the business, we would also look at forms of our ability to expand our margin profile through that increase. I'm not here to talk about 2027. We're gonna talk about our path there is through 2026 and through that is launching new products, executing our plan, driving the business, and that puts us in a better position to execute 2027, 2028, 2029. When you look at, like, this year, obviously below your weighted average market growth rate, which assumes, implies share loss. If you look at where you're losing share, what's kinda giving you the confidence to get back to stabilized share in those businesses? Yeah, I wouldn't agree with losing share. What I can say is, you know, we did have and I talked about fluid conservation. That is a real item. In Q1, it was a bigger quarter last year, and that comp was a challenge for us. When we look at the year, getting back to a more, I would say, you know, we laid it out to neutral or just above. When we go through our businesses, it's how do we align them for driving expansion with customers? We've largely now have gone through and lapped some of the conservation that we've seen and/or ordering process around that, and we're setting up to a more normalized approach on Baxter. I would say, we're very comfortable in our share position. We're very comfortable with the market dynamics, and we're very comfortable with the value for our customers and then realizing that over a long period of time. To build on that, you touched upon the new market baseline and IV solutions that's impacting 2026. Recall, there's also, we're annualizing or lapping the lost Novum sales as well that were in the prior year, and we are also facing some pressures of the injectables business, and we've talked about some of the supply challenges there. Those are all three things that are impacting 2026 that don't necessarily have to do with share. When you first came in, I think you stopped giving quarterly guidance. I think you were like, "Hey, our visibility is not there to do that." You gave some color this past quarter on Q2. Is the visibility in your ability to set guidance getting, you know, better at this stage? Yeah, look, I look at it as no single quarter is going to define our business, right? It's how we continue to execute year-over-year, and that constant drive to always focus on the areas that need to improve. I would say that was one of the areas around why we were very comfortable on looking at the full year guidance. When we think about the year, that's how we're going to lay it out. Okay, fair. I wanna touch on free cash flow. It's kind of been an area that Baxter's probably needing to improve going forward. What's the kind of the levers and how long is it gonna take to start, you know, improving the cash generation here? Again, in Q1, it was a nice area of improvement. Lot of work to do. There's three areas. There's collection from customers, there's payments of suppliers, and how we manage our inventory. We have action plans around all three, and I would say we're getting better. We're not where we need to be. You're gonna see us constantly drive around how do we get better on this process? 'Cause free cash flow, as I mentioned earlier, is one of our value creators, and it's one of the areas we look at with a keen eye on we're gonna hold ourselves accountable to getting better on this on an ongoing basis. You're even confident enough to put buybacks on the long-term slide. That kind of stood out to me. Is that still the plan longer term? Once we get past and get under 3x, it opens up a whole area that we can look at from a capital allocation. There's five points, right? There's debt repayments, there's buybacks, there's internal investment, there's M&A, and then there's dividend. And I would say, we talk about it because we're gonna be looking at that for the future around the greatest return to shareholders and it's over a long period of time. I would say we're signaling it because it will be consideration, of course. It's one of the five levers. I'm not here to tell you that we're at a point at which we're gonna put the percentages of what we're gonna do with the free cash flow, because we're gonna look at that on an ongoing basis around that impact for the long term. M&A is still part of the strategy? Today, we're focused on executing the business. Once we get to that level, M&A is gonna be part of the consideration around what we look at, but I'm not here to tell you what that's gonna look like. Okay. I was asking kind of post three times, obviously. Yeah, yeah. Right. Look, my view is, having done this before, cultivation is king. I'm a huge believer. I call it ABC, always be cultivating. How do we get out? We're building those relationships now, but these take time, and I'm not gonna be in a position where we feel like we need to jump to something. It's about strategic focus on where we're gonna see expanded growth with our position today in the market, and how do we drive that from an overall capital allocation perspective. We're gonna look at ROIC as a threshold. You know, when we start to get to that level, we wanna have built that relationship. The reason why we wanna build that relationship is we wanna have the ability to either have last look or have that relationship for when a company decides they wanna do something different, they reach out to Baxter first. That type of thing takes time, and we're building that, but we're early in our journey there. Your, I guess, prior predecessors or not prior predecessors, but your prior companies you worked at were kinda leading companies in the space. Is that, is that the goal? Like, what does Baxter look like on the other end of this? We wanna be known as strong executors in the markets we serve. What you're gonna see over time is you're gonna see us focus on not only expansion in the markets we participate in, so we wanna outpace our competition in the markets we participate in. We're also gonna look at how do we do systematic M&A around how do we drive our ability to really align to customer and shareholder value. With that's gonna be some portfolio shift, but you're gonna see us focusing on areas that are high value return and how do we be strong stewards for our shareholders. Anything that I didn't touch on, Kevin? You wanna What? All right. Thanks, thanks for joining us. Thank you very much. Appreciate it.