Baxter International Inc. (BAX) Earnings Call Transcript & Summary

Thank you everybody in the room and on the webcast for joining us today at Citi Unplugged. And I'm thrilled to have the next presenters from Baxter, Joel Grade, the CFO, and Clare Trachtman. Thank you, both of you.

So Joel, you've now been the CFO for a little over 4 months, and I would love for you to talk about what has surprised you the most and what we were like, hey, I got this?

Sure, yes. No problem. I guess I'd start by saying, look, it's been an amazing journey for these first 4 months. The people at this company are just incredibly passionate about the mission of this business. And it's -- there's some tremendously talented people in this organization. And so I would say one of the things that you want to say incredibly pleasantly surprised me is coming in from a different industry [indiscernible] I've been in this company is but I've -- it's been a really great transition for me from that standpoint. I'd say from a surprising standpoint, I think I don't know if I call it surprising, but in the sense that where I came from, was a very operationally driven business. It was very -- it was again a large complex global distribution business. And I think just from industry in general, and somewhat Baxter operationalizing things in terms of how we work, specifically around things like driving for cash flows, for example, one of those areas that I think we, at Baxter, need to do a better job of just operational rigor around driving working capital. Just certain areas that we could optimize from an operational perspective. I think we've made good progress on our supply chain, for example, but probably surprising was the amount of opportunities we had in the procurement side where a lot of our sourcing is single source, things like that, were, I'd say, surprising to me, but opportunities for us. And probably the other piece I would say is even from a pricing standpoint, we typically -- in this industry and in Baxter we'd enter into longer-term contracts that doesn't offer us to do a lot of flexibility around things, input costs go up, we don't pass those along to our customers as easily. Those are things that I think as we move forward, we're going to do a better job of. And so that's where I'd recall a few of the things maybe that are initial reactions to my first 4 months here at Baxter.

So that leads me to -- you have a pleasure of playing together the '24 guidance. And I would love to know what the factors were? We'll start on the revenue side. What were the factors that brought you to the revenue guidance, and you divided it up between base or core Baxter and then in anticipation of the win or expand. Let's start from the top.

Yes. I would say a couple of things. One is -- just to reiterate, we talked about a 3% to 4% from ex-Kidney and obviously, around 1% Kidney. And I think the -- what you see there is building on some of the momentum that we had starting in the fourth quarter into some of the businesses ex-Kidney. I think that's reflected in some of the view that we've taken going into Q1. Yes, I'd say that's both, again, reflective of the momentum and candidly, giving ourselves some cushion in terms of, hey, what things could go wrong in the year? There's always going to be something. There's nothing specifically to call out there. But I think those opportunities exist. And I would say one of the -- maybe the follow-up questions on as well, what do you see as different upside opportunities potentially.

And downside [indiscernible]

Yes. And again, I think, look, downside opportunities, I think -- as I said, I think some of that -- there's some of that that's built into our forecast somewhat risk-adjusted.

Yes. That's exactly. Yes. Okay. The potential downside risk.

Yes. I think on the upside, I guess I'd point out maybe 3 things that are just thought-starters as much as anything. I mean one is that we've taken somewhat of a more conservative view on hospital capital spending than maybe others in the space have. And I think that's one. I think the second is that we do have a fair number of product launches that the company has come out with. And I think our -- the view on what the new business generation from those is, is something that may have -- potentially have further upside. And I think the third is just as a reminder is that we actually don't have anything built into our '24 view for Novum. And so in the event that we were to receive something positive on that, that would obviously be the upside as well because that's not built in our '24 model. So that's a view on the top.

We will get to that. Despite sort of low single-digit revenue growth for the combined company, EPS guidance is for double digits. And walk us through the levers that get you from revenue to EPS growth?

Yes. So I think the a couple of things that I would call out. I mean, a, is that there's a pricing component that we have looked at and said, we're going to continue to make some progress there. Now there's a little bit of an offset to that in the sense that we took some temporary higher pricing measures in 2023 that fell off at the end of 2023. But I think, again, we do see pricing as some further upside as we head into 2024. I think from a -- I think our independent supply chain is really an area that has, I'd say, one of the larger opportunities from a margin expansion space. There's a couple of different categories. So what is that? Well, I think, number one, I think we have a series of margin improvement programs that are everything from automation in the warehouse to just generally productivity opportunities that are part of that work. We're continuing to work on the procurement and purchasing side of our business where I think there's continued opportunities for upside. And as well as just generally speaking, I call it network optimization in terms of how we think about our supply chain logistics distribution world. And so I think those are some of the areas I'd say are the largest opportunities for upside in our margin during the course of this year and then obviously some of the volume growth as well.

Okay. And just to put the final point on that. So kind of a lot of those things that Joel referenced, we did guide to at least 50 basis points of margin expansion. But to your point, you kind of get to that double-digit growth at EPS, we do have a benefit in our nonoperating expense line items, in particular on interest expense, which will be lower in 2024 versus 2023. That does help our EPS growth in 2024. The pricing that you took in 2023, can you quantify it?

Yes, so I would say it was north of 100 basis -- or north of 50 basis points, probably approaching around 100 basis points.

Okay. And that's falling off?

So pricing is still positive in 2024. It's probably closer to about 50 basis points in 2024.

And I know one of the things we have spent some time talking about with you is the contracts which are up, the GPO contracts, which are up for renewal. Can you walk us through how many contracts? When does that become implemented, is it that multiyear versus 1 year? How do we think about that benefit?

Yes, I'll start and Clare can chime in. I mean we -- you'll recall that we have really 3 primary GPO contracts that are what you're referring to, 2 of those were things that we actually entered into the negotiation of and that essentially completed the negotiation of -- that will apply now to the benefits in 2025. And so I think the -- good news is we had, I think, a successful negotiation in those. Again, we won't give, obviously, specific views on specific customer pricing implications. But certainly, guidance you'll see going forward will include what we see as margin -- as overall margin enhancement from that space. And so I think -- and just as 1 other reminder, the GPO contracts have been negotiated. But then from there, we do need to continue to negotiate with each of the individual IDMs to actually implement that. I would think about this as both a -- both pricing but also a volume opportunity within those contracts. Obviously, there's tiers within the GPO contract, and so we certainly would look to leverage both the opportunities to take pricing, but also to continue to drive volume growth.

So 2, 3, what products are they related to? And is there a way to think about the financial impact?

So I would say it's primarily -- the renegotiation is around our medical products and therapies business, also a little bit of our pharmaceuticals. And again, these are centered in the U.S. A good portion of our business in the U.S. does run through GPO contracts. So it does account for a good percentage of that. But I think to Joel's earlier point, we're not going to get into the specifics in terms of what the actual pricing is. We will frame it similar to how I just said earlier in terms of what we believe the overall pricing benefit is across our portfolio, inclusive of these renegotiated contracts. Because again, we are focused on getting pricing in every market that we can and on every product that we can. So this is not something we are just limiting to the U.S. I know in the U.S., we were somewhat constrained previously because we were locked into these longer-term contracts. I would say one of the key elements with these new contracts that we're in the process of finalizing is that we have for that like put in new terms and conditions to prevent being stuff like that in the future.

Okay. I want to talk a little bit about or a lot of it, depending how much you want to spend on this, Kidney Care and Vantive. And -- wow, so much to cover. How is the organization preparing for the spinout? And at what stage will we get additional information?

Why don't I take the first and I'll turn over to Clare for the second. I think -- so the -- one of the things that I -- when I walked into this company, one of the things I actually have been really impressed with is the rigor around the preparation for the spin. As you know, this is a business that's been part of Baxter for 16-plus years. And obviously, there's, I'll call it, an entanglement, if you will, of the manufacturing capabilities, in particular, in this space. So yes, I would say, look, there's -- the teams have been working tremendously hard and focused of separation here in 2024. They have been focused extensively around this point of how do we -- what is the post-spin world of a lot of the manufacturing business is looking again both from who's going to control sort of what piece and the MSAs associated with that to ensure we have a clean separation of those companies. So I would just say that that's been a tremendous amount of work. There's been a number of legal entity conversions that have happened in waves that have already been successfully moved. So I'd say we're on a good path towards that, the work has been rigorous and I'll sort of -- Clare for the second part of the question.

Yes. I think to echo everything that Joel's saying. I mean, as we've continued to make progress against the separation, I think our -- basically, our confidence that the separation really will result in incremental value for all of our stakeholders has really just been further enhanced and further reinforced. So I want to start with there. So obviously, we had -- we announced this in January of last year, and we've put a lot of effort, and I think all of that work has just further reinforced that thesis that we had starting last year. So in saying that, the teams have made meaningful progress towards the separation. And so I think that we're on track for the separation in 2024. And the plan would be that we do provide incremental information, whether it be from a filing or Capital Markets Day prior to the separation occurring. So we'll do that.

If I could just -- If I could build on one thing Clare just said. I mean I think the strategic rationale of separation is something that, again, I think has become very clear in terms of how -- and to me, it's really about -- it's really a capital allocation story as much as anything. I think within Baxter, I think the returns on a highly capital-intensive business. So that doesn't mean that give as much attention to investment as it could or should. But on its own, I think it's -- again, it's able to focus those investments and its own capital allocation priorities, and therefore, Baxter as well post separation really has the ability to actually think about our capital allocation, how we drive our ultimately our portfolio.

So you talked about spinning it out in '24. I had originally had in my mind mid-'24. Is that still the right timeframe?

So I think we are committed, and I'll let Joel in, like we believe that we can occur -- the separation will occur in 2024. So we are marching towards that. And I think to reinforce our earlier comments, the teams are making meaningful progress towards that.

Okay. I almost don't want to ask this question, but I'm going to GLP-1s and renal care, I was -- there's so much I could say on this, but I'd like to hear what you have to say on it. And upcoming data, any thought process along that?

Let me take it. Yes. So with respect to the GLP-1s, obviously, we've made some public comments on it. I think that I do -- hopefully, the noise has died down a little bit with respect to it. The flow data will be released. The Novo Nordisk has commented on the first half of this year. One of the things I would say is we don't -- there were multiple endpoints with the trial, so we don't know exactly kind of what was met as part of it. We do know that there are certain classes of drugs out there already that have been shown to slow the progression of CKD. Obviously, not stopped the progression, but slowed the progression and may have been available for over a decade. And we haven't really seen any significant impact on overall, I would say, patient volume growth for that ESKD population during that time despite that. So again, this is something that is part of it -- one of the endpoints was just to slow the progression of it. Obviously, there was a mortality endpoint as well. So as we look at it, there could be a balancing of things because more patients, unfortunately, pass away prior -- during their CKD stages prior to even reaching ESKD. So if you're able to prevent some of that, you might have actually more patients eventually going into ESKD than you would have because of obviously reduced mortality. In addition, if you're slowing the progression, you will still end up with patients going into ESKD. So I think that from our perspective, we've seen no near-term impact on our business as a result of GLP-1. This would be something that would obviously play out over decades. But there is a potential that if we are starting to treat patients, patients are healthier, there are more patients, patients that are living longer that you might actually eventually see an influx of patients within to that disease state.

And certainly, as a company, obviously, we're in favor of all things.

Yes, exactly.

It makes sense. When you're thinking about things such as capital back orders, things like that, help us quantify what the impact has been so far on Baxter? And I'm going to also add supply.

So what I would say is during 2022, we were particularly supply constrained on a number of products. And I'd say it was really focused on those electromechanical componentry in semiconductors. We've been able to really address that. And I think as we look at our Front Line Care business within our HST business, we were able to address really the elevated backlog levels that we saw. Another business that was impacted by that was our infusion pumps as well. So -- and again, we talked about with Spectrum last year being able to have incremental volumes for Spectrum as well as a result of just increased supply availability. So I think that for both of those, we've been able to really start addressing that demand. Now demand for infusion pumps remains high. We -- Joel referenced this on our earnings call. We expect really continued demand for Spectrum into 2024. We've been able to secure incremental componentry to address that demand. So I think that we feel pretty good about that. Within our CCS business, so our Care and Connectivity Solutions also within the HST business, what I would say is that business always runs with the backlog, so that's our beds, our care communications products, our surgical solutions business, that business is always going to run with a bit of a backlog. It obviously had reached some height, I'd say it's more normalized. And we've talked about the fact that our orders sequentially improved every quarter last year. We expect that and growing in the fourth quarter, and we expect that momentum to continue into 2024 with sequential improvement in orders for that business, in particular, the CCS business.

You walked right into Novum, so...

That's fine. Yes.

Perfect. Yes. I appreciate that. What is taking so long? Or is it not taking long? Is it on track given the process?

I mean I think it's fair to say that this has been an extended process. With respect to Novum. As we commented on publicly, there was 1 outstanding issue with Novum. We did submit that to FDA before the end of the year, right at the end of the year. So right now, we are awaiting FDA's decision. We've kind of said, we're not -- we can't comment on their approval. I think to Joel's earlier point, we have nothing embedded in our guidance for that. But we did address the one outstanding issue. I think these are very -- this is a brand-new pump platform. There hasn't been a brand-new pump platform really introduced for many years. So this is something that we built from scratch. So I also believe that this is a space that we have seen a number of recalls. So FDA is taking their time with it. I think one of the things we did -- we were -- we did launch Novum in Canada. And so as things emerged as part of that launch, what we did was we brought those to the attention of FDA, and we were able to address all of those issues that came up, and that was part of the submission to FDA. So now from our standpoint, we've addressed everything, and we're cautiously optimistic that we'll hear something in 2024.

And the good news is we're continuing to sell, in the meantime, our Spectrum pump that is -- it's certainly -- obviously, we look forward to Novum, but Spectrum has been really successful pump for us. I mean we've had substantial growth last year in that, we're anticipating some really strong growth this year in that pump as well. And including, I would say, modest share gains in that space as it relates to the Spectrum pump itself.

So if guidance does not include Novum and let's pretend Novum is FDA approved tomorrow, I wake up, then, to wake...

I like that idea.

And I went through my note, the first question someone's going to say to me is, what's the upside?

So -- and again, I think that from -- to be clear, there will be some time so it's not an immediate sale. There will be some time involved post approval that we'll have to actually touch some of these pumps and bring them in. But -- and pumps in general, do tend to be a longer sales cycle. Of course, you obviously have to meet with your engineers, your clinician, your nursing staff, all of that. But if it is tomorrow, can we have sales in 2024? Yes, that is within the timeframe that we would be able to have sales. Now I think it's a little bit of a flip, Joanne, because we have Spectrum built in. We have some, I would say, pretty meaningful growth for Spectrum this year. So it's not totally incremental to that because you may then find customers want to -- you had planned on Spectrum.

That's also what I'm trying to get to. Yes.

We're going to go to Novum. I think what it is though is we believe the opportunity set and for us to be much more competitive with the Novum platform is out there. So really, they got to go to some maybe non-Baxter customers today, go to them and really explore the possibility of moving over to Novum. So I think it's about, can we really gain some incremental market share for Novum, and we believe that, that possibility really exists.

Yes. I would just say generally the other way to think about that, it's somewhat of an incremental bump though, not necessarily just a step-change growth to just a little bit to what Clare just said.

Yes. It really is the opportunity set that it opened. I think we've done a really great job with Spectrum protecting our base, protecting our -- gaining some, to Joel's point, I would like to share, but I think the opportunity that opens up with Novum much more.

I was speaking to somebody else this morning and I was trying to think about this concept of pent-up demand for -- in the hospital [indiscernible] I know you're still selling Spectrum. But how do you think about getting in with a new pump someone else getting in with a new pump. And are you upgrading your fleet? Or are you -- walk me through the sales cycle? Because I think this could be meaningful for you and I want to -- I don't overextend my thought process on it or I don't underestimate?

So do I believe there's pent-up demand? I do believe there's some pent-up demand. I think you'll see for probably the next couple of years, a larger turnover in the installed base than you would normally see. Part of it just driven by some of the issues that we have discussed and that have been present within this marketplace. So I think for the next couple of years, you'll see higher growth in infusion pumps. It is more of a -- to be clear though, it is more of a replacement cycle. The market per se is not growing. I mean maybe you have some slight growth in your installed base -- but it's more just about the replacement cycle. And what I would tell you is that the average age of pumps out in the field today is probably longer than what you have seen historically.

Anything else you want to talk about?

No, I think that's good. Yes.

Around 2 years ago.

Yes, at the end of 2021.

Okay. Where are you on the integration of it? What has surprised you the most? What would you like to [indiscernible]

Yes. So number one, I mean, we've made a substantial amount of progress on the integration overall. I think it's fair to say there's still some work to be done as it relates to what I'd call a full integration of the business. Obviously, there's -- just -- I'd call it the spirit of competing priorities related to the separation of Kidney et cetera, et cetera. But certainly, I want to start with the fact that there's been substantial progress in that integration. Yes, I think where the continued opportunities exist. On some end on -- from a technology and sort of a back-end standpoint, but then also sort of how do we think about the go forward on really fully taking advantage and optimizing the connected care piece of that business. Obviously, there's a set of capabilities that, that business brought into that space. And I think as -- more to come at Capital Markets Day on this, but I think there's a -- there's an element of that, what I would call a commercial aspect of that integration, I believe, is still an upside opportunity for us in the long term.

Products internal, are you [indiscernible] you're seeing [indiscernible] on a product basis?

On a product basis. I mean, I think that -- so the Front Line Care business obviously did well last year with the kind of addressing that backlog that they had. The CCS business I think that it did -- there were some impacts one, we have lower rental revenues that we experienced last year that depressed growth there. But we launched our Progressa+. So our new ICU bed, we've seen some nice momentum there. Obviously, this is in the context where we did see some slower capital -- overall reduced hospital capital spending last year. So I think again, we've started to see that stabilize to improving. We expect that to continue to improve. But I think we'll continue to build off the Progressa+ launch. We've also, and Joel referenced this kind of our Bardy business within Front Line Care has been a real nice little gem for us that's growing tremendously. We have some new innovation coming out within that space. I think we'll continue to build around that as well.

I might be stealing some of the thunder from your Capital Markets Day. And in the pipeline, what is that you want us to be talking about at some stage, we're going to be done with the answer [indiscernible] asking some of these other questions. How do we think about building a pipeline or understanding the pipeline?

Yes. So I guess what I would say to that is I think in the longer term, our business is going to be growth in this company is going to be a combination of both organic growth and inorganic growth. And I think the -- I think this is going to -- this is a company that will be constantly viewing our pipeline. And again, I want to be clear on that. I think that the inorganic growth is more in the tuck-in, fold-in type stuff as opposed to what I'd call a large strategic transactions. I think we -- and so I just think the -- we certainly have a good pipeline -- good portfolio of products. We will continue to refine that. And -- but I -- but all that's going to be post the opportunity for us to pay -- our capital allocation probably right now is paying down our debt. So let me be really clear on that is that one. When we think about what's the timing of some of that? And again, we'll talk about more at the Capital Markets Day. But our first priority right now is ensuring that we pay down, get ourselves to a leverage target that we've talked about that will then allow us to actually be more active in terms of our capital allocation towards growth. So...

Right. I mean I'm jumping over [indiscernible].

Understand. I just want to make sure there's no question on [indiscernible] how I'm answering that question.

[indiscernible] new Baxter, and I'm trying to think about what is the revenue growth? What are the products inside of it? What makes it tick? Because in the very near term, the investors were speaking with are trying to work on some of the products and what is your core expand and how do we think about the mechanics of that? But I'm going to -- we're going to quickly get to the other side of it. And what does -- how can be Baxter look like that?

Yes. I hate to not answer that question, but I'll be honest with you, that's really going to be the crux of our Capital Markets Day that we will come out with on post spin and sort of what does that next generation look like? What is almost a longer-term algorithmic view on how to think about our company from a growth and margin standpoint as well as what would be kind of the view of the composition of our portfolio in terms of those areas that we think are really going to drive -- again, going to be the focus and prioritize view on this. That's, again, I'll just need to say that for Capital Markets Day unless there's anything you want to say.

No. I mean I think everything it will come down to a lot about reinvestment though, from a capital allocation standpoint because this is about driving innovation and accelerating innovation as we go forward. So I think that's what we're going to be acutely focused on kind of in this post-separation world.

But if 2024 guidance expanded 3% to 4%, is 3% to 4% is the base case of what business has brought expansion?

Yes. I think what you've heard Joe say on our previous earnings call, that actually, we do see there's another potential step up in terms of growth acceleration. He had specifically quoted 4% to 5%.

4% to 5%. Yes. I mean I think one of the things, if we think about just our overall HST business this year, we've guided to approximately 3%. Joe referenced on the call, we do have a number of products launching kind of towards end of this year, but more into 2025, that should really help to accelerate that growth going forward.

[indiscernible] products?

So we -- I mean, again, I'd say there's a number of different ones. I think we'll get into that a bit more within the Capital Markets Day, but we have some new technologies within our Care and Connectivity Solutions business, the new monitors within our Front Line Care business. So -- within our Surgical Solutions business, there are some new, I would say, new technologies coming out there as well. Now clearly, obviously, within pharma and medical products and therapies, we've kind of talked it, within medical products and therapies, it's really focused on Novum and building out -- further building up the Novum platform, continuing to have a steady cadence of product launches within the pharmaceutical business. But then, yes, both within Front Line Care and CCS, there's a number of product launches that occurred in the past.

And lunching a new [indiscernible] Progressa+.

Progressa+

So walk me through the sales cycle of Progressa+, why it's an important? I'm just using this as exemplary. And I'm going to assume it comes out of the price premium?

Yes. It is at a price premium. And again, this is, one, to somewhat similar to a pump, it's a replacement cycle. It is a replacement cycle. So I think that our HST business in Hillrom in general, was the market leader within the ICU beds. They both on the med-surg with their Centrella and then with the Progressa on the ICU. And so it's about driving further enhancements. I think that particularly for large-scale ICU centers, this bed really kind of addresses a lot of their needs. It has a lot of capabilities in terms of being able to care for the patients and digital capabilities as well that kind of allow it to lock into the nurse call and...

Diagnostics.

Exactly within the bed. So we -- and so there's a number of features that kind of went into the Progressa+ as well that built off the existing Progressa that was the market-leading bed that I think further drives -- to drive that. And again, so you see hospitals, one, looking to upgrade their beds. Their ICU beds, they would look at Progressa+, but also, we would clearly look at new opportunities as well to go into some existing markets that are non-Progressa, that are non-HST today and look for opportunities to kind of bring our bed in our portfolio offering there as well.

Okay. So this is a 2-part question. We're spending more and more time on that procedures moving into the ASC. And there was a particular orthopedic company that talk about partnering with you guys for beds and things of that nature. Walk me through both sides of that discussion, moving into the ASC and then the partnering opportunity for those that are already there.

Yes, I'll start and I'll let Clare chime in. I mean I think certainly, obviously, ASC being a trend that does clear, we've talked about actually part of our investment and our capabilities from a sales and marketing standpoint is targeted towards how do we really move into that space and start to be able to take advantage of those opportunities as well. And so one of the things you've heard us talk about is some of the additional investments in our capabilities and from an SG&A perspective, and that really falls into some of that category. Partnership-wise, we really haven't talked or we haven't said specifically who specific partnerships are with, we have talked about the fact that we will be entering into different partnerships in that space. But again, from our perspective, we actually haven't been specific round, that looks like.

What percentage of your revenues [indiscernible]

So I would say there's definitely a percentage where we are located right now within the ASC would be the ASCs that are affiliated with hospitals that are covered under our current GPO contracts, okay? So for those clinics that are already associated with it. On the independent side, I would say it's not as much, maybe a little bit more on the Hillrom, Welch Allyn side, things like that. But on the core Baxter side, we're somewhat limited within that ASCs associated with an acute care setting under our existing GPO contract.

Okay. But you could under...

The plan is to move into those other independents. But where we're seeing obviously where you are seeing that growth goes into those independent clinics, so a lot of that building that out. And that's to Joel's point, where we've targeted and we've basically kind of built this entire commercial team to be able to go after and look at that space.

Okay. So you built a team to go with...

Yes, we have. That's what we did last year.

And then you brought the potential for contracting with others?

For partnering. Exactly. Yes. And we have a great -- I mean, we do have a nice portfolio that we can bring to the ASC setting with our pumps, with our solutions, with our pharmaceuticals, with our beds, with our monitoring equipment, with our -- obviously, our surgical tables, our white screens, all of that. So it's a very compelled. We even have waiting room furniture. So...

Waiting room furniture [indiscernible]

Which I didn't know we did.

[indiscernible] Switching gears just a little bit. How do we think about financial leverage [indiscernible].

Sure. So one of the things we've talked about is we've set a 2.75x net debt-to-EBITDA target. That was something that we've publicly stated we'd be working towards. And I would anticipate that would be sometime in 2025, either we'll get at or near that number. I would say a couple of key points. One, investment grade is important to this company. I think the financial flexibility choices it allow us for. And so I would say the -- our -- okay, okay. Our long-term leverage target is something we'll talk about further at our Capital Markets Day, but you should think about it somewhere around what we've targeted now at or near that number.

If we were together this time next year, what do you think we'll be talking about?

I guess what -- I would say a couple of things. I mean, number one, as we have this past year, you'll see the successful execution of some of our key strategic initiatives. I think as we think about the almost a year in review in 2023, we had 4 consecutive quarters of tiers that we're going to do, as we did and we met or exceeded that. I think the execution of the sale of BPS, the execution verticalization, and now as we head into 2024, these what I believe the successful execution of the separation of the Kidney business. So I guess my view of this would be, I'll say, 3 things to summarize it. One, is the consistent execution we've had and we said what we were going to do and we met or exceeded that. The idea that we've successfully executed on the strategic initiative with spin and/or the separation. And at this point, then we will have come out with -- we've had a Capital Markets Day that would have said -- here's what the next generation Baxter looks like post separation. Those will be the 3 things I would...

Yes. That's where I was going. So yes, excellent. Joel, and Clare, thank you so much.

Thank you, Joanne. Thank you very much.

Thank you. Appreciate it. Thank you, everyone.