KEY EXECUTIVES:
Edward J. Ludwig, Chairman and CEO
John R. Considine, Vice Chairman
Vincent A. Forlenza, President
David V. Elkins, Exec. VP and Chief Financial Officer
Gary M. Cohen, Exec. VP and President, Medical
William A. Kozy, Exec. VP and President, Diagnostics
David T. Durack, Sr. VP, Corporate Medical Affairs
Scott Bruder, Sr. VP and Chief Technology Officer
GLOBAL HEADQUARTERS: Franklin Lakes, N.J.
Franklin Lakes, N.J.-based Becton Dickinson always has been a steady financial performer. Despite difficulty in financial markets at the end of the year and increased raw material costs, fiscal 2008 (ended Sept. 30) was no exception to the firm’s historically solid results.
One of the company’s mottos is: “Helping all people live healthy lives.”
It seems that positioning the company to respond to this directive also results in a healthy bottom line.
Company revenues of $7.2 billion for the year represented an increase of 13 percent compared to fiscal 2007, which reflects an overall estimated 6 percent favorable impact from foreign currency translation that affected all three of the company’s product segments—Medical, Biosciences and Diagnostics. Income from continuing operations rose significantly to $1.1 billion, up 31.7 percent.
“We are pleased to report another strong year for BD, one in which we exceeded our strategic and financial goals despite a challenging business environment,” said Edward J. Ludwig, chairman and CEO. “All segments contributed to our success and growth. Implementation of disciplined spending controls enabled us to expand our operating margins as we continued to make significant capital and R&D [research and development] investments to support our innovation strategy.”
Revenue for BD Medical (the largest slice of the company’s sales pie) rose by 11 percent over 2007 to $3.8 billion, which reflects an estimated 6 percent favorable impact from foreign currency translation. Key growth contributors, according to the company, were Pharmaceutical Systems and Diabetes Care products. Safety-engineered devices continued to be an important contributor, increasing by 10 percent globally, with an estimated 2 percent favorable impact from foreign currency translation, company officials noted. Sales in the United States of safety-engineered devices grew 5 percent to $1 billion in 2008, from $987 million in 2007.
International sales of safety-engineered devices grew 29 percent to $534 million in 2008 from $414 million in 2007, with an estimated 11 percentage points of such growth coming from the favorable impact of foreign currency translation. In 2009, the company expects sales of safety-engineered devices to increase about 5 to 6 percent in the United States and 11 to 12 percent internationally, after taking into account an estimated unfavorable foreign exchange impact of about 9 percent.
The Medical division’s principal product lines include needles, syringes and intravenous catheters for medication delivery; pre-filled IV flush syringes; syringes and pen needles for the self-injection of insulin and other drugs used in the treatment of diabetes; pre-fillable drug delivery devices provided to pharmaceutical companies and sold to end-users as drug/device combinations; surgical blades/scalpels and regional anesthesia needles and trays; critical care monitoring devices; ophthalmic surgical instruments; sharps disposal containers; and home healthcare products such as ACE brand elastic bandages.
Revenue for the company’s Diagnostics unit grew 13 percent compared to 2007, reaching $2.2 billion in sales, including a 5 percent favorable impact from foreign currency translation. The Pre-analytical Systems unit grew 12 percent to $1.1 billion, with an estimated 5 percent favorable impact from foreign currency translation. Global sales of safety-engineered products increased 14 percent, with an estimated 4 percent favorable impact from foreign currency translation, due, in large part, to strong sales of BD Vacutainer Push Button Blood Collection Sets, the company noted. Revenues for the Diagnostic Systems product group increased 15 percent, with an estimated 4 percent favorable impact from foreign currency translation, and reflected growth from cancer diagnostics products and infectious disease testing systems.
BD’s Biosciences revenues rose by 16 percent to $1.2 billion. As with the other sectors, the figure includes roughly a 6 percent favorable impact from foreign currency translation. The Cell Analysis unit of the division grew 19 percent. Sales of the BD FACSCanto II (clinical analyzer) and BD FACSAria II (research sorter) and clinical reagents significantly contributed to the strong growth.
Part of the company’s growth is attributable to solid research and development efforts, and an eye toward strategic expansion. In 2008, BD, which is more than 110 years old, invested nearly $1 billion in new capital investments and R&D. In April 2008, the company opened a new manufacturing facility in Suzhou, China, to produce rapid diagnostic products. In June, it opened yet another plant—a $34 million expansion—in Quebec, Canada. A $53 million facility to produce cell culture media is under way in Florida. In addition, a large state-of-the-art facility to produce pre-fillable syringes is under construction in Tatabánya, Hungary.
The plant, which is more than a $100 million investment for BD, is expected to open in 2010. Also noted for its numerous philanthropic activities, including helping to fight HIV/AIDS in Africa, in 2008 it was named one of America’s most admired companies by Forbes magazine, as well as one of the world’s most ethical companies by Ethisphere magazine.
BD kicked off 2009 with new faces in the front office. Vincent A. Forlenza was named president, and David V. Elkins became executive vice president and chief financial officer (replacing John Considine, who remains vice chairman).
Forlenza will oversee BD’s three business segments in addition to International and Quality. He will continue to be a member of the Office of the CEO, along with Considine, Executive Vice Presidents Gary Cohen, John Hanson and William Kozy, and Elkins, who will join the office of the CEO. Forlenza joined BD in 1980.
He was named executive vice president in 2006 and was most recently responsible for leading BD Diagnostics. Elkins will be responsible for executive management and oversight of BD’s global financial operations. He joins BD from AstraZeneca, where he has served since 2006 as vice president, chief financial officer, North America and Global Marketing, a $13 billion business.
Considine continues his oversight of the company’s Integrated Supply Chain department; Information Technology; Environment, Health and Safety; Project Management and Engineering Services; and Security.
So far, for the six months of fiscal 2009 (ended March 31), reported diluted earnings per share from continuing operations were $2.32, an increase of 12.5 percent compared to diluted earnings per share from continuing operations of $2.16 from 2008.
For the first half of the year, revenues in the United States were $1.6 billion, an increase of 1 percent from the prior year period. Revenues outside of the United States were $1.9 billion, representing an increase of 0.5 percent from FY08 (including an estimated 6 percentage points of unfavorable impact from foreign currency translation).