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Title 2 © 2012 Abbott Laboratories Page 2 © 2014 Abbott Laboratories Page 2 © 2014 Abbott Laboratories
Forward-Looking Statement
Some statements in this presentation may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott’s operations are discussed in Item 1A, “Risk Factors,’’ to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2013, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
Title 3 © 2012 Abbott Laboratories Page 3 © 2014 Abbott Laboratories Page 3 © 2014 Abbott Laboratories
Large and growing markets
Favorable demographics and economics
– Rapidly expanding aging population globally
– High birth rates in emerging markets
– Increasing socio-economic status in emerging markets
– Growing awareness of the role of nutrition for health and wellness
2013 Abbott Relevant Nutrition Market
Abbott Nutrition Large Markets and Favorable Trends
Sources: Euromonitor, Nielsen, IMS and company estimates.
Adult $4Bn
Pediatric $26Bn
Title 4 © 2012 Abbott Laboratories Page 4 © 2014 Abbott Laboratories Page 4 © 2014 Abbott Laboratories
#1 based on the adult and pediatric markets in which Abbott competes
Abbott Nutrition #1 Nutrition Company Worldwide
Adult Nutrition • #1 in the U.S. • #1 worldwide
Pediatric Nutrition • #1 in the U.S.
Global Nutrition • #1 or #2 in 25 countries • 50 consumer brands; 100 countries
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Rounded Sales Mix in Full Year 2013
Abbott Nutrition Unique Balance across Geographies and Portfolio
45% US
Sales
55% OUS
Geographic Balance Portfolio Balance
Sales
55% Pediatric 45% Adult
Title 6 © 2012 Abbott Laboratories Page 6 © 2014 Abbott Laboratories Page 6 © 2014 Abbott Laboratories
Abbott Nutrition Growth Strategies
Strengthen Portfolio with steady rhythm of science-based
new products
Expand Footprint in key high-growth emerging markets
Grow, shape, and further penetrate the adult
nutrition market
Expand Operating Margins to fund
investments in growth
Title 7 © 2012 Abbott Laboratories Page 7 © 2014 Abbott Laboratories Page 7 © 2014 Abbott Laboratories
Abbott Nutrition Leading with Science
Singapore
• Strong investment in R&D; part of our heritage
• R&D Productivity
– New product launches
– Clinical trials & patent applications
– Localized R&D capabilities
• Expanding our footprint and capabilities
– New facilities in or near priority emerging markets
– Partnerships to leverage external expertise
Title 8 © 2012 Abbott Laboratories Page 8 © 2014 Abbott Laboratories Page 8 © 2014 Abbott Laboratories
Abbott Nutrition Science-Based Benefit Platforms
Tolerance
Lean Body Mass
Cognition
Metabolism
Immunity
Inflammation
• Early Development • Learning & Memory
• Sensitivity • Comfort • GI Health
• Resistance • Allergies
• Caloric • Density • Epigentics • Diabetes
• Muscle & Bone • Recovery
• Inflammatory Disease Processes
Title 9 © 2012 Abbott Laboratories Page 9 © 2014 Abbott Laboratories Page 9 © 2014 Abbott Laboratories
Pediatric Nutrition Science-based, Differentiated Portfolio
Combination Prime Nutrition
UP-AGE MATERNAL INFANT SPECIALTY
Title 10 © 2012 Abbott Laboratories Page 10 © 2014 Abbott Laboratories Page 10 © 2014 Abbott Laboratories
Abbott Nutrition Growth Strategies
Strengthen Portfolio with steady rhythm of science-based
new products
Expand Footprint in key high-growth emerging markets
Grow, shape, and further penetrate the adult
nutrition market
Expand Operating Margins to fund
investments in growth
Title 11 © 2012 Abbott Laboratories Page 11 © 2014 Abbott Laboratories Page 11 © 2014 Abbott Laboratories
China
India
Brazil
Russia
Vietnam
Mexico
Turkey
Pediatric Nutrition Focused on Key Priority Emerging Markets
Title 12 © 2012 Abbott Laboratories Page 12 © 2014 Abbott Laboratories Page 12 © 2014 Abbott Laboratories
Abbott Nutrition Growth Strategies
Strengthen Portfolio with steady rhythm of science-based
new products
Expand Footprint in key high-growth emerging markets
Grow, shape, and further penetrate the adult
nutrition market
Expand Operating Margins to fund
investments in growth
Title 13 © 2012 Abbott Laboratories Page 13 © 2014 Abbott Laboratories Page 13 © 2014 Abbott Laboratories
Adult Nutrition Favorable Demographics
Population Age 50+ years old (key markets; in millions)
China India United States
Brazil Mexico Vietnam UK Indonesia Japan
Source: United Nations, Department of Economic and Social Affairs, Population Division (2011). World Population Prospects: The 2010 Revision, CD-ROM Edition.
% of Total Population (key markets)
22% 40%
2010 2050 2050 2010
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Adult Nutrition Innovation to meet local market and clinical needs
Ensure 1973
Category Creation
Innovation Global Expansion Local Solutions
Ensure Today
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Adult Nutrition Broad Portfolio for Recovery and Healthy Aging
Most Sick & Compromised
Well and Healthy Aging
Disease-Specific Hospital Healthy Aging Recovery/LTC Acute Care • Diabetes • Kidney Disease • Oncology
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Adult Nutrition Lean Body Mass loss in Aging and Recovery
Average muscle-mass loss with age
Cha
nge
(Kg)
-1.0
-0.5
0
Lean Body Mass loss in Bed Rest1
~1 kg (>2lbs)
Hospitalized Older Patients
More than 2 lbs in just 3 days
1Paddon-Jones, Abbott Nutrition Research Conference: Selected Summaries. The Role of Nutrition in Accretion, Retention and Recovery of Lean Body Mass, from 2009:9-14
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Adult Nutrition Potential to Improve Health Economic Outcomes
Length of Stay Episode Cost 30 Day
Readmission Rate
21% 21.6% 6.7%
• HEOR Study “Impact of Oral Nutritional Supplementation on Hospital Outcomes”
• Published in American Journal of Managed Care
• 44 million hospital episodes across the US over 11 years
Source: Philipson, T.J., et al., Impact of Oral Nutritional Supplementation on Hospital Outcomes. Am J Managed Care. 2013;19:(2): 121-128.
Title 18 © 2012 Abbott Laboratories Page 18 © 2014 Abbott Laboratories Page 18 © 2014 Abbott Laboratories
Abbott Nutrition Growth Strategies
Strengthen Portfolio with steady rhythm of science-based
new products
Expand Footprint in key high-growth emerging markets
Grow, shape, and further penetrate the adult
nutrition market
Expand Operating Margins to fund
investments in growth
Title 19 © 2012 Abbott Laboratories Page 19 © 2014 Abbott Laboratories Page 19 © 2014 Abbott Laboratories
2011 2012 2013 2015
13.2% of sales
>20% of sales
Nutrition Operating Margin: Targeting >700 basis points of expansion
Margin Improvement Initiatives
Product Materials & Packaging
Manufacturing Processes
& Plant Locations
Supply Chain & Distribution
Product & Market Rationalization
Abbott Nutrition Significantly Expand Operating Margin
15.8% of sales
18.7% of sales
Title 20 © 2012 Abbott Laboratories Page 20 © 2014 Abbott Laboratories Page 20 © 2014 Abbott Laboratories
Abbott Nutrition Unprecedented Capacity Expansion in 2014
Meeting Demand and Enhancing Profitability
Tipp City, Ohio
Aseptic Liquid Facility
Gujarat, India
Powder Facility
Jiaxing, China
Powder Facility
Title 21 © 2012 Abbott Laboratories Page 21 © 2014 Abbott Laboratories Page 21 © 2014 Abbott Laboratories
Abbott Nutrition Delivering Against our Key Growth Drivers
Leadership
#1 US Pediatric
#1 Adult
#1 or 2 in 25 countries
Balanced Portfolio
55% Pediatric
45% Adult
55% OUS
45% US
Innovation
~70 product launches in 2013
Scientific heritage
6 key benefit platforms
Emerging Markets
45% of Sales
Building portfolio, presence,
capabilities
Margin Expansion
+550 bps
since 2011
>20% operating margin by 2015