Abbott 4Q15 Earnings Call Notes

Abbott Laboratories’ (ABT) CEO Miles White on Q4 2015 Results

Foreign exchange impact on bottom line will be more pronounced in 2016

“foreign exchange will again be a growth headwind in 2016. We’re now entering the fifth year of this dollar bull cycle, while we actively worked to mitigate the impact of currency on our results, the impact of exchange on our bottom line would be more pronounced in 2016 due to the mix of currency movements and certain timing effects.”

Underlying dynamics remain strong in a lot of these emerging markets

“The frustrating thing and I think it’s frustrating for a lot of multinational companies that are U.S. based is the underlying market dynamics remain strong in a lot of places. Every morning we get up, we see CNBC. Everybody brings their hands about China, but whether China is 7% growth or 6% growth, 6% is way bigger than the rest of the world. It’s a fundamentally strong market for us as our practically all of these emerging markets.”

The oil based economies, that’s a little different

“Now, the oil-based economy, the ones we were extremely dependent on oil, take Venezuela – okay, there are different stories. And the volatility, unreliability and sustainable market there is different than just about anywhere in the world. So okay, there was an outlier”

Last year we were almost involved in a deal that went through at a price that was plain un economic

“we’ve watched those valuations over the last year when deal heat turned and I can tell you that there was still one particular one that we were involved in an auction for and the valuation that that property went for, we did not win it. But the valuation that property went for was non economic. I mean just plain non economic. I would challenge the buyer to explain where the economic return was in that particular deal. They obviously have their reasons and they obviously saw something rest of us didn’t appreciate. I’d say is an understatement but the evaluation are at a level in some cases that you have to question prudence.”

I think some of the prices that people are offering for sale are not prudent

“I think right now, first of all I don’t see a lot that people are offering up for sale in effect and you know the old maxim; everything is for sale at some price. Well the price of some of these things would be for sale at isn’t prudent, it just isn’t prudent. So I think you have to step back and say we’re not in that zone. We’re not going to be that irrational in some cases and that’s me, I mean I hate that I’m going to see some of this in print later but I think that.”

Not looking to do M&A in our nutrition business

“we are not looking to do anything with regard to M&A in our nutrition business today. I mean if something came along opportunistically we would look at everything but the fact is that business is – that’s an organic business for us and all of our performance objectives and things we want to do in the nutrition business globally are organically driven and we think we’re in a good position for all of that.”

In the med device space there are a bunch of big companies or a bunch of small companies. Not much in the middle

“I think the current medical device space broadly defined today, there is either a bunch of big companies or bunch of little companies. There is not much in the middle. And the couple of things in the middle are extremely highly valued relative to their current performance. And I think there is a lot of speculation or question about whether or not that kind of value will play out.”