11. Becton Dickinson & Co.
$7.4 Billion
KEY EXECUTIVES:
Edward J. Ludwig, Chairman & CEO
Vincent A. Forlenza, President & Chief Operating Officer
David V. Elkins, Exec. VP & Chief Financial Officer
Scott P. Bruder, M.D., Ph.D., Sr. VP & Chief Technology Officer
Patti E. Russell, VP and Chief Ethics & Compliance Officer
NO. OF EMPLOYEES: 28,803
GLOBAL HEADQUARTERS: Franklin Lakes, N.J.
It may not have been a banner year for Becton Dickinson and Company, but it most certainly was a solid year. In an overall rough financial market, Becton Dickinson managed to put out a steady stream of notable products and, for the 38th consecutive year, increase its dividend to shareholders. This continued tradition is one in which Director Emeritus Henry P. Becton, who died in October 2009 at age 95, would have been proud.
In FY10, which ended Sept. 30, 2010, Becton Dickinson’s board of directors declared a quarterly dividend of 41 cents per common share, an increase of 4 cents per share, or 10.8 percent from the previous quarter.
“We delivered against our own internal targets and against our commitments to our shareholders,” said Edward J. Ludwig, chairman and and CEO. “This is the 10th consecutive year Becton Dickinson has achieved its annual objectives….We are pleased to be able to continue to create value for our shareholders while also making strategic investments for Becton Dickinson’s future.”
Becton Dickinson reported total revenues of $7.4 billion in fiscal 2010, a 5.5 percent increase over fiscal year 2009 (5.6 percent on a currency-neutral basis). Business segments remained steady from FY09: BD Medical saw the biggest increase of 6.7 percent (6.2 percent on a currency-neutral basis) to $3.8 billion. In an earnings call with investors in November 2010, Chief Financial Officer and Executive Vice President David Elkins attributed the growth mainly to the diabetes care business. While this increase is extremely modest when compared with FY09, it more than accounted for the absence of the ophthalmic systems unit, which was sold to RoundTable Healthcare Partners in August 2010.
Becton Dickinson also unloaded its critical care and extended dwell catheter product platforms to Argon Medical Devices Inc., a portfolio company of RoundTable (the financial terms of these agreements were not disclosed). These platforms were classified as discontinued operations for all quarters, except for a portion of assets related to the extended dwell catheter product platform.
The company’s other segments increased at about the same rate: BD Diagnostics increased 4.2 percent (4 percent on a currency neutral basis), to $2.3 billion—but the segment took a 2 percent hit after the H1N1 flu pandemic caused sales to spike in the first half of the previous fiscal year.
“For the second half of the fiscal year (2010), the pandemic flu resulted in an almost 2 percent negative impact to our revenue growth, due to the international pandemic revenues that we recorded in the second half of fiscal year 2009 that did not repeat in the fiscal year 2010,” Elkins said. The net impact to revenues for the full year was about 20 basis points benefit, according to Elkins. Additional Biosciences stimulus and supplemental orders in the United States and Japan benefited FY2010 by about 50 basis points.
BD Biosciences, which was driven by strong instrument and reagent sales in the company’s cell analysis business, increased 4.4 percent (6.8 percent currency neutral) to $1.2 billion. Data showed a 4 percent to 7 percent decline in OB/GYN visits in the last two quarters, but the company offset that loss over the full year basis.
“We are proud of our accomplishments during 2010,” Ludwig said in the company’s 2010 published annual report. “We met our financial and operational goals despite the challenging macroeconomic climate facing our industry.”
Becton Dickinson kicked off FY2010 with its only acquisition of the year, of Ann Arbor, Mich.-based HandyLab Inc., a manufacturer of molecular and diagnostic assays and automation platforms, for $275 million.
The company’s fiscal 2010 operational goals also included expanding its presence globally. Becton Dickinson established new manufacturing facilities in San Luis Potosi, Mexico, in March; Tatabanya, Hungary, in April; and Mebane, N.C., in May.
Besides the opening of several new facilities, the year marked the launch of several notable products; the BD Vacutainer Push Button Blood Collection Set With Pre-Attached Holder debuted in the third quarter. The set was designed to protect healthcare workers from accidental needle stick injuries. The third quarter was a busy one for the segment—it also turned out the BD Max GBS Assay, the first U.S. Food and Drug Administration-cleared assay for the detection of Group B Streptococcus on the BD MAX System, and the BD Ultra-fine Nano, the world’s smallest pen needle, which provides a less painful injection experience for patients with diabetes while retaining the effectiveness of a larger needle.
Fiscal year 2010 also saw the promotion of President Vince Forlenza, who now is president and chief operations officer. Forelenza has overseen operations for each of the company’s business segments since January 2009. In January 2010 he also assumed responsibility for the Integrated Supply Chain and Information Technology functions.
“In addition, in 2010, we maintained consistent operational excellence across the P&L (profit and loss),” Ludwig explained. “We invested in capital expenditures, invested in emerging market infrastructure, increased our investment in R&D (research and development) and delivered steady predictable cash flow and return to shareholders through both dividends and share repurchases.”