What BD Expects for 2018



BD’s 2018 guidance

Becton Dickinson (BDX) released its 1Q18 earnings results on February 6, 2018. For detailed information on the earnings results, read Becton Dickinson’s Fiscal 1Q18 Results Beat Analyst Estimates. The company announced the completion of its acquisition of Bard on January 29, 2018, after receiving final regulatory approval. BD posted 1Q18 results as a standalone company and didn’t include Bard sales in 1Q18. Starting in 2Q18, BD will report its earnings results as a combined entity with Bard. For details on the new reporting structure of the company, check out BDX’s New Reporting Structure after Bard Acquisition.

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Fiscal 2018 sales guidance

In fiscal 2018, BD expects its sales growth to come in at 30% to 31% on a reported basis. This includes the accretion from the Bard acquisition and currency tailwinds of ~200 basis points. On a comparable currency-neutral basis, the sales growth of the company is expected to be in the range of 4.5% to 5.5%. These estimates include a 50-basis-point negative impact from US dispensing business changes and the negative impact of Hurricane Maria in Puerto Rico on Bard’s business during BD’s fiscal 1Q18. However, on excluding the adverse impact of these factors, BD expects to register underlying sales growth of 5% to 6% in fiscal 2018. No impact from Hurricane Maria on Bard’s sales is expected going forward. The below diagram shows the fiscal 2018 guidance for standalone BD, standalone Bard, as well as that of the combined company.

Segment-wise sales guidance for fiscal 2018

As previously discussed, after the Bard acquisition, BD will realign its BD Medical and Bard legacy products with respect to the company’s go-to-market strategy. Thus, the new BD Interventional segment doesn’t entirely represent the legacy Bard business.

In fiscal 2018, BD Medical is expected to register 4% to 5% YoY sales growth, whereas the BD Lifesciences segment is expected to grow in the range of 4.5% to 5.5%. This compares to the company’s previous guidance range of 4% to 5% sales growth for both segments in fiscal 2018. The new BD Interventional segment is expected to register fiscal 2018 YoY sales growth in the range of 5.5% to 6.5%, which excludes the negative impact of Hurricane Maria on Bard’s business.

Geography-wise fiscal 2018 guidance

According to BD, the combination of BD and Bard will accelerate its developed as well as emerging market growth profile. In fiscal 2018, developed markets are expected to register sales growth of 4% excluding a 0.5% negative impact from the US dispensing business changes and Hurricane Maria. Emerging market sales are expected to grow in the low double digits. China is expected to witness mid-teen growth.

BD’s peers Abbott Laboratories (ABT), Thermo Fisher Scientific (TMO), and Baxter International (BAX) are expected to register sales growth of 12.9%, 12.7%, and 6.4%, respectively, in their next full fiscal year on a reported basis.

In the next article, let’s look at BD’s EPS and margin guidance for fiscal 2018.


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