Abbott Laboratories (ABT) at JPMorgan Healthcare Brokers Conference

Brian Yoor – SVP and CFO

By 2050, 17% of the global population will be over 65

All of our businesses are well-positioned to address the most relevant needs and to build on attractive healthcare and demographic trends such as improving social economic conditions in emerging markets, in a rapidly aging global population that are driving increasing demand for healthcare. In 2015 people above the age of 65 comprise 8.5% of the global population. In just 15 years this will increase to 12% and by 2050 is projected that people over the age of 65 will comprise nearly 17% of the global population.

 

Expanding middle-class in emerging markets is a significant long-term growth opportunity

In emerging markets, rapid growth in healthcare is being driven by an expanding middle-class and improved access to care. Healthcare spending as a percentage of GDP remains low in these geographies compared to the developed world representing a significant long-term growth opportunity as emerging markets continue investing to modernize their healthcare systems.

 

60% of sales are international

In addition to this unique product balance, our nutrition business is also geographically well-balanced with roughly 40% of our sales occurring in the United States and 60% outside of the United States including nearly 50% of our total nutrition sales in emerging markets… We have also built a world-class global supply chain and development organization that spans both the developed and emerging markets including state-of-the-art manufacturing facilities and localized R&D efforts in China and India in order to develop innovative products designed to meet the local adult and pediatric nutritional needs.

 

Diagnostics testing influences up to 70% of healthcare decisions

Moving to our diagnostics business, which remains a reliable growth business consistently achieving above market growth in both developed and emerging markets. Diagnostics testing influences up to 70% of healthcare decisions and lab professionals are under constant pressure to deliver test results of quality, speed and efficiency.

 

ABT enters the arena of med tech with the acquisition of St. Jude

With the recent acquisition of St. Jude represents a major strategic move that establish Abbott with a premier medical device business with leading positions in cardiovascular, neuromodulation and diabetes care markets. Together the combined medical device portfolio will have annual sales of approximately $10 billion… With the acquisition of St. Jude, Abbott will now compete in nearly every area of the $30 billion cardiovascular device market and hold number one or number two positions across several large and high-growth markets

 

New facility in India will act as a hub, shipping products to over 30 countries

Additionally in the fourth quarter of last year, we announced our new Established Pharmaceuticals innovation and development center in India. This center will develop new drug formulations indications, dosing, packaging and other differentiated offerings and will act as a hub shipping products to over 30 countries that will further develop the products to suit their local needs.

Abbott Laboratories’ (ABT) Management Presents at Wells Fargo Securities Healthcare Broker Conference Notes

China is attractive in the long-term, currently it is difficult to penetrate and adapt to

“What I would classify China, it’s a market in transition, still very attractive long term but there is a lot of also channel dynamics that happen very fast and consumer trends and behaviors that change really fast and that’s what companies right now including ourselves are adapting to making the adjustments around.” Brian Yoor – Senior Vice President and Chief Financial Officer

 

Debt ratios have increased considerably as a result of acquisitions, and ABT will not have any more significant M&A activity until de-leveraging goals are met

“we publicly stated that out of the gates we would be at a 4.5 times ratio of debt to EBITDA that we would implement a de-leveraging plan to bring that down to at least 3.5 by 2018… I think, I could set the expectation, we can set the expectation that there won’t be any significant M&A until we get down to a level that we are comfortable with over the longer term” Brian Yoor – Senior Vice President and Chief Financial Officer

 

In current economic environment, ABT believes its 6% growth is very respectable

When you look at 6% growth to your point of where we have been growing, we are very pleased with that type of growth especially when you look across the world and think about where GDP is at, we are in a low growth environment globally speaking, kind of a low inflationary environment, so I think 6% type of growth is very respectable. We have been in that range, so as a starting point we are very positive without that. Brian Yoor – Senior Vice President and Chief Financial Officer

 

Emerging markets are tailwinds for ABT and will continue to be so

“So we are optimistic that on a tailwind perspective that trend of healthcare and healthcare penetration that is still very below the developed markets is going to continue…  So the emerging markets will continue to be a nice tailwind for us given our presence and scale that we have across all of our businesses in emerging markets.” Brian Yoor – Senior Vice President and Chief Financial Officer

 

ABT’s diverse portfolio has allowed it to navigate international turmoil

“the point is there is always going to be some ebbs and flows in Abbott’s portfolio the way we constructed but that’s constructed with intent because I think what’s good about… there is always an incident but the incidence we have been able to navigate because of our diversity and shots on goal that we have in these growth markets but our portfolio has been pretty resilient when you think about the situations that have been going on in the world whether it’s political turmoil, or unrest in some counties, impeachments or Brexits” Brian Yoor – Senior Vice President and Chief Financial Officer