Abbott Laboratories — 2023 Q4

Thanks, Larry. I mean, as I said in my prepared remarks and quite frankly, as we talked about throughout most of 2023, the impact of the strategy we took to take some of the COVID revenue and reinvest in the base business. I think ultimately, that's really the factor here. I mean, we operate in these 4 business segments and their underlying attractiveness still is very sustainable.

Sure. I mean, listen, we hear a lot of companies talk about working here to recover to their operating margin and try to get back to their op margin pre-pandemic. We're in a pretty unique position, I'd say, versus our peers here. Our op margin profile is already at -- is already at the pretty pandemic level. And I think what you saw us do there, Josh, and I talked a little bit about it in my comments, is I think we managed very well strategically the spending piece of it. We accelerated the spending investments when we were at our -- COVID sales were at their peak levels a few years ago. And then we held that spending flat these last couple of years, even though our top line was growing pretty significantly here.

Sure. Well, I think we've showed pretty strong robust growth in our EP business throughout all the year, even in the face of actual end market competition, it's been strong across the board. I don't think it's just been a Europe story. U.S. has been strong. China has been very strong for us this year, especially in VBP. I mean there were some price challenges throughout the year with VBP, but the volume we picked up, the market share we picked up more than offset that. So it's really been across the board here. And I think it really is about the strength of the portfolio. So not only having a strong mapping system with our EnSite X, I think is at the core, good mapping disposables and diagnostic disposals also. And I think launching TactiFlex, which is the flexible tip combined with the contact force. We've seen great results, great outcomes, whether it's outcomes to the patient or time of procedure. We've seen that consistently around the world.

Sure. Strong growth in Q4 under $1.5 billion. U.S. was up 32%. And I'd say still haven't -- team hasn't even had to unleash L3 in the U.S. market in 2023, I think you'll see that now really hit in 2024. But being able to put those kind of growth rates in the U.S. without even having to launch L3 with a competitive new system. I think that speaks a lot about our position, our scale and our brand.

Yes. Thanks. I don't know if I regret using that terminology or not now, Danielle, but I guess I would say, yes, they are great products, and we didn't think about calling them that because they were going to be a flash in the pan for 1 or 2 years. We look at these as really long-term great growth opportunities that we have that will significantly add to the company over the next few years. And quite frankly, they have added a good amount of growth for us this year, and they'll accelerate.

Yes. I think kudos to the team here, we set out a target at the beginning of last year -- this time last year to get to market leadership in our October call, we had already confirmed that and let's say, over the last couple of months, that continues to expand in terms of our position versus the #2. Yes, I mean I think you'll now have the full year effect, Joanne, of having all of that share. And I'd say, given the strength of the portfolio of team and what we went through and the actions that we've taken, I'd actually expect us to actually surpass our pre-recall share. I don't know exactly when, but that will be my expectation on that.

Well, yes, we've got a strong balance sheet and provides us a lot of flexibility on our capital allocation plan. On the M&A side, Vijay, listen, I think it starts off with -- we've got great pipeline. We have great organic opportunities here to be able to kind of drive top-tier sustainable growth. So that ends up putting -- allowing us to be in a selective position here where we're not trying to use M&A as a way to kind of bulk up our top line or to cover any kind of top line gaps that might be there. So that allows us to be sustainable -- allows us to be more selective. And if there are opportunities that fit strategically and can generate an attractive return, then like you said, you've done the math, we've got the flexibility and the firepower to do that. But I'm not looking to acquire businesses simply to make the top line look good.

Operator, we'll take 1 more question, please.

Yes. I don't think that we're seeing kind of any kind of catch-up or pent-up or anything like that. I think what you're seeing here is more -- at least I can speak for our portfolio. I just think you're seeing more adoption of the technologies, right? So I think there was some disruption. We've talked about it in some parts of some procedures that require a little bit more preop planning or imaging before and imaging after. I mean I think those -- that combined with the labor shortages that occurred 2022. I think that, that probably slowed a few of them down, but I don't think that there was a bolus returning as a result of that.

Okay. Thank you, operator, and thank you all for your questions. This now concludes Abbott's conference call. A webcast replay of this call will be available after 11:00 a.m. Central Time today on Abbott Investor Relations website at abbottinvestor.com. Thank you for joining us today.