OREANDA-NEWS. Baxter International Inc. (NYSE:BAX), a leading global provider of essential healthcare products, today at its investor conference outlined its strategy to drive profitable growth to support the company’s aspiration of delivering top-quartile performance. The company defined its top quartile goals around three core areas: quality and safety for patients and their healthcare providers; best place to work for its employees; and industry-leading performance and returns for investors.

“Baxter’s strong portfolio of products, promising pipeline, channel strength, and global presence position the company to deliver important medical innovations to drive growth and deliver returns in line with our aspirations,” said Baxter Chairman and CEO Jos? (Joe) Almeida. “We’re pleased to update our financial outlook, which represents a meaningful improvement compared to our prior expectations. Baxter’s goals build on the strength of our recent performance and our prospects for growth.”

2018 Outlook

The company expects to grow sales 3 to 4 percent on a compounded annual basis at constant currency rates from 2016 through 2018. The company expects a 2018 adjusted operating margin of 14 to 15 percent and 2018 adjusted diluted earnings of $2.10 to $2.25 per share. Baxter also expects free cash flow (operating cash flow less capital expenditures) of approximately $1.0 billion in 2018.

2020 Outlook

In 2020, the company expects sales to grow approximately 4 percent on a compounded annual basis at constant currency rates from 2016 to 2020. Through its focus on cost optimization and portfolio management, the company anticipates an adjusted operating margin of 17 to 18 percent and adjusted diluted earnings of $2.75 to $3.00 per share. Baxter expects to generate free cash flow of approximately $1.75 billion in 2020.

“In addition to our updated financial outlook, the successful deployment of Baxter’s retained stake in Baxalta provides the flexibility to invest directly in the business to support our growth aspirations while also returning value to shareholders through dividends and opportunistic share repurchases,” said Baxter’s Chief Financial Officer Jay Saccaro.

The non-GAAP measures set forth above reflect the impact of several known items. The reconciliation of adjusted operating margin for known intangible asset amortization expense of approximately 1 percent results in operating margin between 13 and 14 percent in 2018 and between 16 and 17 percent in 2020. Additionally, the reconciliation of adjusted diluted earnings per share for known intangible asset amortization expense ($0.18 in 2018 and $0.17 in 2020) results in diluted earnings per share between $1.92 and $2.07, and between $2.58 and $2.83, respectively. The reconciliation of free cash flow for estimated capital expenditures of approximately $825 million in 2018 and $750 million in 2020 results in operating cash flow of approximately $1.8 billion and approximately $2.5 billion, respectively.

About Baxter

Baxter provides a broad portfolio of essential renal and hospital products, including home, acute and in-center dialysis; sterile IV solutions; infusion systems and devices; parenteral nutrition; biosurgery products and anesthetics; and pharmacy automation, software and services. The company’s global footprint and the critical nature of its products and services play a key role in expanding access to healthcare in emerging and developed countries. Baxter’s employees worldwide are building upon the company’s rich heritage of medical breakthroughs to advance the next generation of healthcare innovations that enable patient care.