Becton, Dickinson And Co. - 6% PRF CONVERT 01/06/2023 USD 50 - Ser B

Q3 delivered a strong “New BD” start (beat expectations) - Revenue $5.0B (+4.4% YoY, FX-neutral); >90% of the portfolio growing high single digits (with 4 growth platforms double-digit). - Adjusted operating margin: 24.9% (improvement vs performance, but down 100 bps vs prior year); Adjusted EPS: $3.23 (+4.9%), also ahead of expectations. - Notable growth: double-digit in biologics drug delivery (GLP-1s), advanced patient monitoring (APM), PureWick, advanced tissue regeneration, plus strength in peripheral vascular disease and Rowa pharmacy automation.

Guidance raised for FY26; FY27 framed with a known headwind - FY26 outlook updated: revenue growth expected toward the high end of low single-digit range; raise adjusted EPS midpoint. - FY26 EPS guidance: $12.62–$12.72 (range updated; midpoint raised). - FY27 “modest EPS leverage” expectation given: Alaris remediation ends in FY26, creating about ~200 bps revenue headwind in FY27 (vs ~100 bps in FY26 Q4 context). Management expects low single-digit revenue growth and EPS supported by pricing + productivity (BD Excellence) + mix, but not “high leverage.”

What drove performance: growth platforms + commercial/innovation + delivery productivity - CEO credited New BD strategy (“Compete, Innovate, Deliver”) and BD Excellence for both growth and margins: - Commercial investments: e.g., APM sales team +15% in U.S.; management said 100–150 bps of APM double-digit growth already came from these investments early in FY. - Innovation execution accelerated: faster launches, expanded vascular and endourology offerings (e.g., Liverty TIPS Stent Graft; Elyra Thulium Fiber Laser), and new APM monitoring products (e.g., Acumen IQ Plus). - Delivery: ~8% gross productivity in plants; service levels above 90%; record-low backorders; additional AI-enabled supply chain platform deployment.