Vijay Kumar : Understood. And maybe just off of that question, Joe, for you on fiscal ’24. Can you talk about the big variables? What gets better? What gets worse in ‘24? When can Baxter get back to that mid-single LRP thesis? I think the street’s modeling 100 basis points of margin expansion based on some of Joel’s comments here. Does it seem reasonable for you for the street to be modeling 100 basis points margin expansion?
Joe Almeida: So Vijay, let’s start with the top line. We see stability in the market, in admissions, market growth rates. You saw some of the published numbers from other companies, their hospitals. We see that as well, and we continue to have a pretty stable top line growth, and consistently into 2024. So I’m confident about that. We have ex, our Kidney Care, the other three businesses of Baxter have steady growth into next year. They will probably be higher than in 2023. Talking about the bottom line, if you see the sequential improvement in our bottom line, that will continue into 2024. We continue to have cost reductions in our manufacturing facilities. We also get more stable volume and growth in volume, absorption of overhead, and some pricing opportunities in a couple of our businesses.
I just highlight, for instance, the turnaround that we’re seeing in our pharmaceutical business that will continue with new product launches from ‘23 into ‘24, and also the good demand for a SIGMA Spectrum pump from ‘23 into ’24 just to mention a couple of things. And also a stabilization of our HST business that we see in terms of our anniversary, some of the differences in end of fiscal years between Hill-Rom and Baxter. We start seeing the stabilization and the successful launch of our Progressive Plus. Just to give you a couple of things that give us more confidence in 2024 in terms of top and bottom line.
Vijay Kumar : Thanks, guys.
Operator: Your next question comes from the line of Rick Wise from Stifel. Your line is open.
Rick Wise: Good morning, everybody. Good morning, Joe. It’s a funny place to start maybe, and I know that Joel is fairly new to the job, but it’s hard to resist asking, both from your perspective Joel, what did you charge Joel? What are you tasking him? Maybe talk about your requests of him as he steps into the role. And Joel, I’d be curious to hear what kind of special sauce you’re going to bring to the job, and where your priorities lie and just your initial thoughts there.
Joe Almeida: Rick, good morning. Good to hear your voice. Listen, we’re in the process of selecting the CFO for the company. We’re looking for the ability for the person to get operationally into the details and continue to help the transformation of the finance organization. And if you look back at the finance organization in BAS [ph], we had a lot of things that we changed. We have initiated and have done successfully shared service organizations across the board. Also, the development of new talent, the culture, and the people are very important to Baxter. So Joel coming to the company, need to understand that we are a complex operating company. We have a lot of manufacturing sites. We have a significant amount of R&D sites across the globe.
It is a company that spans over 100 different countries in terms of sales, and more than 25 to 30 countries in terms of manufacture and distribution alone. So somebody who had the intellect to combine that ability to understand complexity and get through it and get operational efficiencies out of it, but continues to transform the finance organization and bring the talent and the culture to the point that we need the agility and the ability to cope with different inputs. Also, experience in the M&A space that we continue to rotate the portfolio of Baxter, look at opportunities to transform Baxter’s WAMGR into a higher WAMGR to better value for our shareholders. But I pass on to Joel to answer the other side of your question.
Joel Grade : Thank you. Great to be with all of you this morning. And I really look forward to meeting all of you in person, hopefully in the near future. So look, I’m first of all really excited to be here. I think all the things that I thought about when I was going through the process with Joe and with the team have only been reiterated to me as I’ve gotten here and realized the wonderful opportunities that we have here at Baxter. Yeah, I’d say early impressions, certainly as I said, lots ahead of us, there’s lots to do, but we have great people here and incredibly passionate people as it relates to the mission of this company. And again, really a lot of talent as well is my early review. Yeah, I’d say my early focus, first of all, is going to be about learning the business.
As you know I’m newer to the industry, but certainly I’m going to be focused heavily on making sure I understand and learn this complex, interesting business, so I can really make the best decisions to support the team. And from there, we’re going to focus a lot on how do we continue to accelerate growth, how do we accelerate consistent execution of things, and how do we think about where those mechanisms are to ultimately fund growth and value creation. I’ll certainly be spending time understanding our talents and really just to focus the organization. As Joe said, the background I’ve gotten is both been rounded in finance, ops strategy, M&A, and transformation. And so bringing all those things to the table here for all the opportunities we have at Baxter, just really thrilled to be here, and those are some of the areas I’m going to be spending time focusing on going forward.
Rick Wise: That’s great. And one quick follow-up if I could, sort of picking up on Vijay’s question earlier on ’24. Just from one angle, when we think about current consensus ex-Kidney Co, how do we think about the impact of the spin relative to dis-synergy? Does consensus adequately reflect numbers inclusive of the dis-synergy costs for, when you think about the separation of the two companies and standalone standup costs, said differently, will numbers need to come down? That’s what I think people are, that’s what I’m concerned about, and I think that’s what folks are concerned about. Thanks, Joe. I appreciate it.
Brian Stevens: Rick, maybe a few comments on that. As Joe mentioned earlier, the process of the spin is going between now and we’re planning to wrap up in July of 2024. All the models are still in progress and we are refining our dis-synergy and standalone cost estimates. We do plan to be providing additional information on this in connection with our 2024 guidance that we provide at year end, as well as in connection with an Investor Day that we intend to have in advance of that spin taking place. So no specific guidance on the particular quantification of the synergies at this time.
Joe Almeida: And I want to underscore the fact that we’re going to continue to see progress on Baxter’s top line and bottom line ex those synergies, because we continue to accumulate the cost improvements that we put in place. Also, margin improvement programs, new product launches, the turnaround of pharmaceuticals, and the great demand that we’re having for our SIGMA Spectrum pump. So there are some really good catalyzers I would say, in place that will make ‘24 a better year than ‘23. But I want to make sure that you understand that we will have the dis-synergies. We’re in process of putting them in place.
Rick Wise: Thank you, Joe.
Operator: Thank you. Our next question comes from the line of Pito Chickering from Deutsche Bank. Your line is open.
Pito Chickering: Hey. Good morning, guys, and thanks for taking my questions. On the Novum IQ pump, you now have two competitors with the next-gen pumps in the market right now. Yet your pump sales remain pretty robust in the quarter. At what point do you worry about losing market share to the other pumps? And then on your pump approval, any updates there? Is it worth pulling the 510-K and refilling helps you with the process or any updates there?
