Kidney Co Separation Timing
Q: Is the Kidney Co separation delayed to early 2025?
A: Management confirmed that the Kidney Co separation might shift to early 2025 as they continue to pursue both sale and spin options to maximize shareholder value. They are making solid progress but acknowledge the timing has shifted as they evolve the process.

Margin Outlook Post-Kidney Separation
Q: How confident are you in margin expansion for RemainCo?
A: Management is confident in margin expansion for RemainCo, driven by top-line growth, new product launches, and pricing opportunities. They anticipate about 100 basis points of pricing benefit this year, primarily outside the U.S., with similar expectations for next year as new GPO contracts take hold in the U.S. Investments in automation and efficiency programs are also expected to enhance margins.

Revenue Phasing and Q4 Softness
Q: Why does guidance imply low Q4 revenue growth?
A: The anticipated lower revenue growth in Q4 is primarily due to a slowdown in the compounding business, notably from an Australian customer with planned maintenance reducing volume. There's also an expected slowdown in the kidney business, mainly impacted by value-based procurement in China.

Sustainability of 4%+ Organic Growth
Q: Is 4%+ organic growth sustainable going forward?
A: Management believes the 4–5% organic growth rate, excluding the kidney business, is sustainable and expects strong momentum to continue into 2025. This is attributed to improvements in the HST business and solid performance in the core business, including potential market share gains.

Kidney Co Sale/Spin Assumptions
Q: What are the key assumptions for the Kidney Co sale or spin?
A: The Kidney Co's margins are in the high single-digit to low double-digit range, with earlier quarters inflated by one-time impacts. Management is focused on reducing stranded costs to minimize dilution. Tax implications are considered as part of the overall economics to maximize shareholder value, whether through a sale or spin.

Restructuring Progress
Q: Have you turned the corner on restructuring efforts?
A: Management feels they have turned the corner, noting significant progress in commercial execution and cost optimization. Supply chain improvements and plans to optimize SG&A and shared services are expected to drive consistent improvements in operating income margins over the next 12 to 24 months.

Capital Allocation and Investments
Q: Where are incremental SG&A and R&D dollars being deployed?
A: Incremental investments are focused on innovation in infusion technology, including new pump categories and intelligent software featuring artificial intelligence expected in 2025. Additionally, five new product launches are planned in HST over the next 12 months, along with investments in injectable specialty drugs in the pharmaceuticals segment.

Novum Infusion Pump Rollout
Q: How is the Novum infusion pump rollout progressing?
A: The Novum pump rollout is ahead of expectations, with sales occurring in Q2. There is significant interest from both large and small hospital systems. Management believes this will accelerate growth in Q3, Q4, and into 2025, enabling them to gain market share.

Front Line Care Outlook
Q: What's the outlook for Front Line Care improvement?
A: Management expects Front Line Care to improve as the primary care market stabilizes and government orders resume. New technology launches in cardiology and monitoring are planned for mid-2025, which should drive growth alongside a recovering primary care market.

Infusion Pump Market Share and Pricing
Q: Are you gaining share and how is pricing expected to evolve?
A: Baxter has been gaining about 100 basis points of market share annually in infusion pumps, a rate expected to accelerate with the Novum pump. Pricing contributed approximately 100 basis points in Q2 and is anticipated to remain consistent next year as new GPO contracts impact U.S. pricing.