Becton Dickinson & Co. Deposit Repr 1/20th Cum Conv Pfd Registered Series A

Q2 performance beats expectations; full-year EPS guide raised - Revenue $4.7B, +2.6% YoY (FX-neutral) with >90% of the portfolio delivering mid-single-digit growth. - Adjusted gross margin 54.7% (-90 bps) and adjusted operating margin 24.2% (-110 bps), but both ahead of management expectations. - Adjusted EPS $2.90, +3.9% YoY, ahead of expectations. - Management highlighted double-digit growth in key platforms: biologic drug delivery, Advanced Patient Monitoring (APM), PureWick, advanced tissue regeneration; plus mid-to-high single digit in oncology, peripheral arterial disease, Rowa pharmacy automation. - Full-year adjusted EPS guidance raised to $12.52–$12.72 (from prior guidance), while full-year revenue guidance remains “low single digits.”

“New BD” strategy execution: compete / innovate / deliver showing measurable progress - Compete (commercial rigor): share gains and conversions; examples include Alaris ~50 bps share gains in Q2 and ~150 bps YTD, plus APM strength supported by consumables. - Innovate (faster, more focused launches): applied BD Excellence to 5 development programs YTD, reducing time-to-launch by >10 months on average; examples include EnCor EnCompass biopsy system (US), Revello covered stent (EU, early), and HemoSphere Stream module expansion (US/EU). - Deliver (operational excellence & margin/cash): BD Excellence delivered ~8% productivity in Q2 with service levels >90%; manufacturing footprint reduced to ~50 sites (target to reduce further). - Cost-out program: $200M plan with $150M run-rate already completed, full delivery targeted by end of next year.

Headwinds and negative items investors should track (and how management frames them) - Results partially offset by expected pressure in Alaris, vaccines, and China (collectively described as <10% of revenue). - Tariffs impacted margins: adjusted gross margin down includes ~160 bps tariffs (partially offset by productivity/mix). - Major FDA warning letter issue: BD received an FDA warning letter for its El Paso, TX facility (ChloraPrep/PurPrep). BD voluntarily placed products on U.S. ship hold while completing additional final release testing (~3 weeks); management states no patient safety signals and the products are already tested for Europe. Shipping resumes pending satisfactory test results.