Good afternoon, everyone. My name is Andrew Deissler, Executive Director at Wells Fargo and the Investment Bank. It's my pleasure to introduce Dev Kurdikar, CEO of Embecta Corporation. Dev, maybe just some opening comments. I know it's your first time attending the conference here. Yeah, thank you, Andrew. Thank you for having us. It's been a great day so far, and good afternoon to all of you. Maybe just to provide some context around embecta, we are now a business that's been continuously operating for 101 years. Most of that as a division of BD, Becton, Dickinson, but for the last three and a half years as our own public company. Since that spin-off, obviously, given that this business had been part of a larger company for 95+ years, there was a lot of work to be done in the standing up of the company. Everything from physically moving people from BD offices into almost 40 offices around the world, setting up HR systems, IT systems, payroll systems, and most complex of all, a brand new ERP system, a whole new distribution network, and shared service to support patients in more than 100 countries around the world. Even before we spun off, we had set some targets for what we wanted to do through fiscal 2024. Those targets were we would keep revenue flat, and the business really has been flat since about 2017, but we'd keep the business flat at the top line and have just a little bit of margin to about 30%. I'm pleased to say that we overachieved against those targets by the end of fiscal 2024. The team did that in the context of, you know, we were still coming out of COVID, rapidly rising interest rates, inflation actually shot up more than anticipated. Where we are today, most recent quarterly results were strong, and I'm sure we'll talk a little bit about that in the course of this discussion. Where we are today now is stand-up work is mostly done. We are now very much focused on how do we seed growth back in the business. As part of that, we set forth three priorities for the business. One was continuing to strengthen the core, including transitioning the brand, that's the actual packaging on the box from BD to embecta, expanding our product portfolio through several initiatives, which I'm sure, again, we'll talk about as well, and then increasing our financial flexibility. Given that at spin, we had significant debt, and that obviously constrains us from a capacity for M&A perspective. Paying down debt was a priority. I'm happy to report that we have been making good progress on each of those initiatives, even since the Investor Day that we had in May. Very pleased to be here and look forward to talking about embecta. Excellent. Really appreciate that and appreciate you setting the stage. You talked about, obviously, the strong Q3 results that you delivered. Can you just talk through and explain maybe the drivers behind some of that upside and what are the push and pulls within that quarter that helped you deliver that great? Yeah, happy to. You're right. I mean, look, Q3 was one of the strongest quarters we've had in the business, right? Almost $296 million in revenue, 8% constant currency growth, strong by, certainly, any standard. The overachievement versus our own internal expectations really largely came from the U.S., with both pricing and volume contributing equally. On the pricing front, we had some rebate reserve adjustments, which typically occur at the end of every quarter. It was just a material enough number that we called it out in Q3. That was a year-to-date true- up, and that was pricing- related. From a volume perspective, volume was higher than internal expectations as well. That, I would say, was mostly timing driven by two factors. One is we were doing brand transition in the U.S. and Canada. Just like we did with all these ERP transitions, our primary focus when we do these transitions is not to disrupt product flow to patients. There's some incremental stocking that occurs out of transition, and that occurred in the U.S. The second one, and this is always hard to predict, at the end of every quarter, particularly at the end of our fiscal Q3, the July 4th holiday looms. Sometimes distributors, which are really the purchasers of our products, order in advance of that. Sometimes they'll wait till the next quarter to order. We had some advance ordering in that as well. That was on the U.S. side. Internationally, I think growth was strong. Latin America had good growth. Asia had good growth, aided somewhat by a favorable comparison to a prior year period, as we had gone through an ERP transition over there. There was some weakness in China, which I'm sure we'll discuss again as well, that we observed in Q3. Off those factors, you asked what's sustainable. Certainly, the rebate reserve adjustment we think sticks through the year. When we did our call in August, we essentially tightened the revenue range, but kept midpoint the same as before. The way to maybe think about it is that the improvement in the U.S. business was being offset by sort of our thoughts on what might happen in China in Q4. Those were sort of the puts and takes in Q3. On the pricing dynamics and the volume, it sounds like you're bullish on the U.S. opportunity and outlook for the U.S. geography in terms of pricing and volume. Is that? Yeah, I would say certainly, look, historically, pricing has been a tailwind for the U.S. This year, in fiscal 2025, at the beginning of the year, we said, look, it might be a headwind as we were re-upping some large contracts. As the year has gone by, we've seen that pricing in the U.S. has been maybe a little bit better than we had thought this year. We'll certainly talk about 2026 at our year-end call. Pricing in the U.S. has turned out to be a little bit better than we thought this year. Volume, I think, has been sort of more or less per expectations. This year, also, volume had somewhat of an anomaly. As we called out earlier this year, we said, look, there's a major pharmacy chain that's undergoing store closures. When store closures occur, that doesn't mean patients stop using their product, right? We are chronic use, medically necessary. If they're not going to get it at the pharmacy they're used to, they will get it from another pharmacy. By the time those signals come back to us through the supply chain of, you know, them, that pharmacy chain going from their warehouse to going to a distributor to us, there is typically a time lag. We call that out. Underlying volume trends in the U.S. may be one indicator of what that would be. It's just looking at insulin pens, prescription rates, and those have stayed stable. We haven't seen anything that causes me to sort of change my thoughts around sort of overall volume. Syringe volume is a little bit of a different matter. Syringe volume in the U.S. has been declining because insulin vials have been declining over time. Certainly, there is nothing in that trend that I've seen that would cause an inflection point with that either. Great. Thanks for that. Maybe shifting out of the U.S., focusing on China. China has obviously been an area of focus for you given the competitive and geopolitical dynamics there. Can you update us on what you're seeing in that market today and kind of where you see China fitting into the overall strategy? Yeah. First, maybe just a clarifying comment in China. We don't report China separately, right? Even internally, we have a Greater China cluster that includes mainland China, Taiwan, and Hong Kong. Together, they contribute about, I would say, high single-digit percent of our total global revenues, right? Just to give you some context on the contribution of mainland China, which is what we're going to be talking about as part of Greater China and how important Greater China is to the total business. It's certainly an important part of our emerging markets story. China historically has been a strong business for us, steadily growing. We saw a shift this year. That shift comes in the form of increasing price competition and a greater preference towards local brands. When I say local brands, I mean local Chinese brands, not just products manufactured in China, because we manufacture products in China for China. That is all happening amidst the evolving U.S.-China trade relationship and geopolitical environment. We can't say one caused the other, but it is all quite coincidental. We sell to a handful of national distributors. These national distributors actually prepay us in advance of receiving the goods. They go and sell to hundreds of smaller distributors, sub-distributors that then take those products and sell it into 4,000+ hospital pharmacies and 40,000 retail pharmacies, right? That's sort of how the supply chain works for us within China. Because of all these shifts in demand that we saw, our national distributors started adjusting their inventory levels. That's what drove a decline in our China business in Q3. In the guidance that we gave in August, we gave our thoughts on an expectation that a decline would occur in Q4 as well. That's what's happening in China right now. It's been historically strong. There is unquestionably, we are going through a turbulent period right now. Okay. With that in mind, how do you position embecta's business in China for the medium to long term? Yeah. I continue to be quite optimistic that China will be an important part of our story going forward. Here's why. Number one, it's a big market. There are 150 million people with diabetes, approximately. Half of them are undiagnosed. Insulin use is growing mid-single digits, right? Big growing market. Two is we have great infrastructure already there, right? We are not one of those companies that is now considering, should we expand in China or not, right? We are already there. Strong commercial infrastructure. We have a team that works to generate demand that then the product is supplied by these distributors, both in the retail channel, the hospital channel, as well as the e-commerce channel. We have a plant there that's truly world-class. It's one of our newest plants. It only started operations in 2016. As manufacturing plants go, it's quite new. Half of the volume it produces is used within China. The product that's sold in China is actually manufactured in China, and the other half actually serves markets primarily in Asia. Strong manufacturing operations and commercial infrastructure. That's sort of point number two. Point number three is we have several initiatives that are already in flight and made solid progress in that I think serve the Chinese market well. We are the distributor of an insulin pump in China that's local Chinese manufactured and a local Chinese brand, and our team distributes that product. Two is we are developing a pen needle in China that will serve the Chinese market well, as well as some other price-sensitive markets that's being developed there. Thirdly, there are generic GLP-1 companies over there that have global aspirations that we can provide pen needles to manufactured in China itself, right? For those three reasons, it's a big growing market, an infrastructure that is strong that we are already in, and we have initiatives that sort of further strengthen our presence in China. I think I tend to be still optimistic about sort of long-term what China will mean for the business. No question, we are going through a turbulent period now, unlike certainly that I've experienced in now my almost four and a half years with the business. I feel confident that we're going to come out of it. Great. Appreciate that insight. You obviously mentioned U.S.-China trade relations. I think it's mandatory that I ask a question on your tariff situation. Understanding this is very fluid, where do you stand with the current tariffs and kind of what's baked into your guidance for the rest of the fiscal year? First of all, you're right. The tariff environment is fluid, and I would argue that's an understatement, right? Here's how the tariffs—maybe before I talk about tariffs, let me just set the context on what our manufacturing network looks like, to remind people. We make products in the U.S., syringe products and safety syringes that actually serve markets around the world. We make pen needles and safety pen needles in Ireland that serve markets in the U.S. and Europe, Middle East, and Africa primarily. We make pen needles and Suzhou, that I said earlier, in China that serve the China market as well as Asia-Pacific. Obviously, the supply chain for raw materials that is used in this product is complex, right? We use paper packaging for packaging purposes. We use resin and plastics, and we buy our cannula from our previous parent, Becton, Dickinson. There's a global supply chain here. When tariffs first came into play in our May call, we said we think it's going to be a 25 basis points impact for fiscal 2025. On the last call, based on the tariff truce between the U.S. and China, where those tariffs were 125 basis points, 145 basis points, if you remember, brought down to 10 basis points and 30 basis points, I think we said tariff impact for fiscal 2025 would be negligible. That 25 basis points impact would go away. That's where we stand for 2025. We think it's going to be negligible. Obviously, it's a fluid environment. Yeah, absolutely. I think just demonstrating a negligible impact for tariffs really demonstrates kind of the manufacturing footprint and distribution footprint that embecta has. That's great to hear. Maybe pivoting away from geographies and tariffs, I'd love to spend some time about growth drivers in the business. You highlighted the GLP-1 co-packaging and retail initiatives as a growth driver. How are those programs progressing and what's kind of the timeline for them to meaningfully contribute to embecta? Yeah, we are very excited about the GLP-1 initiatives. Very excited. Literally, every day, we are making progress on those initiatives. This was an initiative we started pursuing aggressively, frankly, less than a year ago post the termination of our insulin patch pump program, right? That was a big strategic shift for the business. Since then, we've been now in continuous discussions with 30+ potential generic GLP-1 companies. Many of them have already signed agreements. Many others we are exchanging documents on, including quality documents. We've received purchase orders for quantities of pen needles. We've started supplying pen needles for test quantities for some of these companies. We are part of regulatory submissions that some of these potential generic GLP-1 entrants are making to various regulatory authorities around the world. The first launch, as you I'm sure you know, some generic companies have already talked about it, was likely to be in Canada in as early as 2026. It's coming up here soon. Some of the other countries that the drug companies are talking about are Brazil and India in 2026 as well. There will be a wave as patents expire and as these companies progress. The interesting part, the reason we are so bullish on this opportunity is it's a generic semaglutide, right? It's a generic Ozempic. Ozempic gets co-packaged. Unlike Mounjaro, Mounjaro if it's sold in a pen, you have to buy the pen needles. Ozempic gets co-packaged. All these generic drug companies want to co-package pen needles. If any of these or several of these succeed, what we are aiming for is that it's our pen needles in those packages, right? It can be a long-term relationship. It's a very different sort of channel for us. Once a patient goes, gets a generic GLP-1, it'll come with a pen needle. That's a very exciting opportunity for us. On the branded side, as branded GLP-1s expand, particularly Cellulose Mounjaro, which is being introduced in the form of a pen in many countries outside the U.S., and if it's not reimbursed by the government authorities and for obesity, it often is not, then patients actually have to go buy pen needles, right? The Mounjaro pen doesn't come with pen needles. We've introduced small packs. We started in Germany. You know, we initially went with a 14-count pack because we thought that the dominant prescription would be three months, but we saw that there were one-month prescriptions, so we came out with a seven-count pack. We've started then expanding in other markets as well. The whole idea is, listen, if you are going to be a GLP-1 user in a pen and you're not getting a pen needle from Novo, we want it to be our pen needle. We think that opportunity could be worth at least $100 million in 2033 and beyond. Maybe if I can just take a minute more on this to explain sort of, you know, the assumptions behind that 2033, beyond the obvious, you know, patent expiration dates, is, you know, we only consider diabetes and obesity indications. We did not consider other indications that some of these drug companies are pursuing outside of diabetes and obesity. You might know that there was a recent announcement that CMS is going to have some pilot programs, Medicaid in 2026, Medicare in 2027, to cover some of these drugs for weight management purposes. We did not assume any change in the reimbursement landscape, particularly in Medicare and Medicaid. We did not assume any shift in the delivery format from auto injectors to pens, which, if it occurs, also uncovers a bigger market for us. Between indication, no change in delivery format, no change in reimbursement, that's what gave us confidence to say this is at least $100 million. Just to note again, those are the same pen needles we make today. Same manufacturing lines. We can do it within the existing manufacturing footprint that we have. Our offstream drives productivity improvement through the existing capital equipment year after year. We are looking at not just an incremental opportunity on the top line, but a pretty significant drop through to the bottom line. For all those reasons, we are very excited about the GLP-1 opportunities for us. Great. Thank you for explaining that. At your analyst day, you laid out a long-term vision for transforming embecta into a more diversified medical supplies company. Can you maybe talk about the progress you've made on that front and what milestones investors should think about over the next 12 months- 18 months? Yeah. Yeah. Look, I mean, that was a big shift for us, right? Laying out a new vision for the company. We were spun off as an insulin company with a patch pump program, right? Last November, we said, listen, we are going to shift focus for a variety of reasons, including our desire to more aggressively pay down debt. We said we are better off sticking to things that are closer to our core and focusing on bringing our net leverage down. The question obviously is, okay, that's great, but then what next, right? The what next that sort of fits most cleanly for us is becoming maybe a more diversified medical supplies company that leverages the core competencies that we have. We are world-class at high-volume manufacturing and distribution of medical supplies under a quality system that's been inspected dozens of times over the last three years, right? That's what we are good at. We said this is what we want to transition towards. We finished stand-up. We said this is a three-phase sort of path. The first phase was just standing up the company, which I talked about. Now we are in the phase of seeding growth. We got to find ways to get growth back in the company. The LRP that we laid out on that investor day, 2026- 2028, was about initiatives that we are pursuing. Those initiatives really fall into three priorities. The first one is we got to keep strengthening the core, and we got to do brand transition, right? I'll talk about progress on each of these in a minute here. The second one was expanding our product portfolio, and the third one was increasing our financial flexibility. You talked about sort of what's happened, right? Let's talk about each one of them. On strengthening the core brand transition, 90%+ of our revenue in the U.S. and Canada is now in the embecta brand. The U.S. itself is more than 50% of our global revenue, right? Canada is one of our top seven markets. That's well on its way. We'll do international next year, and at the end of next year, most markets around the world should be around the embecta brand. On expanding the product portfolio, we already talked about GLP-1, so I won't talk about that, including progress made since investor day, more agreements signed, supplies of pen needles already gone out. We've also made progress on a new pen needle and new syringe, again, closer to our core and developing that product program. Thirdly, on increasing financial flexibility, we had laid out a target of we would pay down about $110 million in debt. We already actually achieved it at the end of Q3. In fact, we said, you know, I think we can do actually more than that because we'll pay down incremental debt in Q4 and get to $150 million. Our net leverage was about 3.2 at the end of Q3, and we expect we'll approach 3 at the end of our fiscal year. Solid progress on each one of them. I think with what we should lay out for 2026 and beyond, we'll talk more in a couple of months when we have our fiscal year-end call. I'm very pleased with the progress that we've made as a company in transitioning towards our vision of a diversified medical supplies company, particularly given the strong shift we made less than a year ago of instead of going deeper into insulin delivery, more diversified and starting these programs, and a lot of progress has been made since then. Right. Yeah, it's certainly an exciting time as you guys pivot away from the challenging and difficult work that you guys have done separating the company. Now you can really go on your forefoot and start addressing the top line. That's great to hear. Very exciting. You've obviously mentioned this a couple of times. The separation is largely complete. 100% of the revenue is flowing through embecta's system. How does this change maybe the near or longer-term strategy for embecta in terms of operational flexibility? You talked about capital allocation, etc. Yeah, in several ways, right? I mean, our separation, you know, every spin is different. I would argue that our spin was perhaps one of the most spinny of them all because of all the stand-up work that had to be done and really had to just, we took out a business that had been part of something else for 95 years. You can imagine how integrated it was in core BD and stand-up this business. Now that's done. By the way, when we were doing that, we were under time pressure to do it, which means that we had to sort of copy and paste a lot of what the processes were pre-spin to our own company. Now we have the flexibility to re-examine that and say, is that the most efficient way? Does that way of operating make sense for us at our scale versus being part of a larger division? I think cost optimization is something that we will focus on. Geographic optimization is another one, right? I mean, we are in more than 100 countries around the world. Seven countries contribute more than 80% of our revenue. Long tail. Why do we have a long tail? Because there were countries that our products were sold because they were being sold along with many other BD products. As a standalone company, does it make sense to have such a long tail? That's something that we'll look at as well. Now that the stand-up work is behind us, we probably have spent more than $400 million in one-time stand-up costs, right? That free cash that you saw in Q3, we're going to see the cash flow generation ability of this company. It's going to come in greater focus as every quarter goes by. That is allowing us to pay down debt, which is going to allow us the capacity to do the right opportunistic M&A so that, again, we can get growth back into the business. That is our focus now. I know, Andrew, you talked about capital allocation, so maybe just a quick comment on that, right? Number one priority is paying down debt. As you can tell, I've probably said that four or five times already. It's paying down debt. We'll continue to maintain the dividend. That's certainly what our current plan is. We understand that we're going to use some of that free cash to finish our brand transition. This year we said one-time stand-up costs would be $50 million- $55 million, which is one-third of what we had spent last year. Next year, it'll be even less than that, and the year after it should be much, much less than that, right? In the meantime, next year we'll still consume some cash. Once we have net leverage down, it's all about can we find the right asset, right M&A opportunity to inflect growth back in the business. That is certainly something we want to pursue, as well as potentially looking at some organic growth investments. We have some development programs that we think can help transition us towards the diversified medical companies we just spoke about. Is there a way to accelerate some of that and deploy some cash towards that? Great. Lastly, on the separation, obviously you've talked about increased focus, optimization, the decline in one-time costs. I think it's an important question. Should investors have increased confidence in the predictability of embecta's business model now that the financial outlook and the variability associated with stand-up costs, customer ordering patterns, are a result of the spin-out? Yeah. Look, admittedly, the last three years have been, it's been hard to sort of discern the underlying performance of the business from all the other costs that have incurred, right? Maybe I'll take it in sort of two categories, right? If you just look at revenue, first, there is normal business quarter- over- quarter fluctuations in the revenue because most of our revenue flows through distributors. Whether the order comes in and gets shipped in the last day of a quarter versus the first day of the next quarter can cause some lumpiness quarter over quarter, right? Which then has some impact once you do year-over-year comparisons, once you see what's happening. That's normal. I've always said this business is far more stable and easier to examine over a 12-month period than it is over a quarter period. Not because the variation doesn't occur at the end of the year, but because it's occurring over a much larger base than over a quarter. That variation will continue to occur. We've had significantly more variation than that because we've had, what, six or seven waves of ERP implementations around the globe. Our primary focus when we did those implementations was to ensure that there was no discontinuation in product supply. What that meant was we made sure there was enough inventory in the channel that if there was a problem with product supply, patients could still get product. We did all those implementations without causing a discontinuing product supply, but that inventory still had to get used up. That caused variation in year-over-year performance. That's from a revenue. That variability driven by ERP should go away. Our last ERP implementation was done in June. Now going forward, we'll have four clean quarters, and that'll establish a good sort of comparison. It's important to note also our business is not seasonal. We are a chronic medical use device, right? You still need our devices in the fourth quarter of a calendar year as many as you do in the first quarter of a calendar year. The fourth quarter of a calendar year is fiscal first quarter of the next year for us, right? There is no seasonality. If you look at our business over long term, you will see every quarter is, you know, 25%± maybe one, one and a half point if you think about sort of paging of revenue over the course of a year. From a P&L perspective, we adjust out sort of one-time costs. There were times when we were incurring TSA costs as well as we had our own people, right, doing the work. Those TSAs will all be going now. I think you'll see a cleaner P&L going forward. From a cash perspective, you're going to see the underlying cash flow generation. You already saw it in Q3. You'll see that going forward because these one-time costs, you know, obviously cash flow is the cash flow. Once these one-time costs wean off, I think the underlying power of the business from a financial margin and cash flow profile will become more and more evident. Excellent. I know we're coming up on time here, but just final question for me. If you could leave investors with, you know, your key takeaways on the outlook for the company, what would that be? Yeah. Look, like I started, it's a 101-year-old company with a lot of resilience and stability in the business. Stand-up work is done. We've laid out a new vision for what we think this business can be, particularly post the discontinuation of the patch pump program. We've launched initiatives in this phase that we call seeding growth that are moving us towards that vision. We want to move forward to that vision with speed, with pace, but do it still in a thoughtful, mindful manner. That's sort of, I would argue, being the hallmark of all the complex projects that we've completed so far. It's a very exciting phase. It's far more exciting to be thinking about how do we get growth in this business than be thinking about the next ERP implementation. We're very excited about that. Great. I really appreciate the time here and glad we could host you at the conference. Thank you, Andrew. Thank you for having us. Appreciate it.