Hello, and welcome to BD's Earnings Call for the Fourth Quarter and Full Year Fiscal 2022. At the request of BD, today's call is being recorded and will be available for replay through November 17, 2022 on BD's Investor Relations website on bd.com or via phone at 866-342-8591 for domestic calls, and area code +1 (203) 518-9713 for international calls. The replay bridges are now dedicated so you no longer need a conference ID to hear the replay. For today’s call, all parties have been placed in a listen-only mode until the question-and-answer session. I will now turn the call over to BD.

Good morning, and welcome to BD's earnings call. I'm Francesca DeMartino, Senior Vice President and Head of Investor Relations. On behalf of the BD team, thank you for joining us. This call is being made available via audio webcast at bd.com. Earlier this morning, BD released its results for the fourth quarter and full year of fiscal 2022. We also posted an earnings presentation that provides additional details on our performance. The press release and presentation can be accessed on the IR website at investors.bd.com. Leading today's call are Tom Polen, BD's Chairman, Chief Executive Officer and President; and Chris DelOrefice, Executive Vice President and Chief Financial Officer. Tom will provide highlights of our performance and the continued execution of our BD 2025 strategy. Chris will then provide additional details on our FY '22 financial performance and our guidance for fiscal 2023. Following the prepared remarks, Tom and Chris will be joined for Q&A by our segment presidents, Mike Garrison, President of the Medical segment; Dave Hickey, President of the Life Sciences segment; and Rick Byrd, President of the Interventional segment. Before we get started, I want to remind you that we will be making forward-looking statements. I encourage you to read the disclaimer in our earnings release and the disclosures in our SEC filings, which are both available on the IR website. Unless otherwise specified, all comparisons will be on a year-over-year basis versus the relevant period. Revenue percentage changes are on an FX-neutral basis unless otherwise noted. In addition, the results and guidance we are presenting today are on a continuing operations basis, which excludes the historical results of Embecta, which are accounted for as discontinued operations. When we refer to any given period, we are referring to the fiscal period unless we specifically note it as a calendar period. I would also call your attention to the basis of presentation slide, which defines terms you will hear today, such as base revenues and base margins, which refer to our results excluding estimated COVID-only testing. With that, I am very pleased to turn it over to Tom.

Thanks, Francesca, and good morning, everyone, and thank you for joining us. I'm extremely proud of our organization and our performance this year. We closed the year with excellent momentum, having delivered strong and consistent growth in our base business. For the full fiscal year, we exceeded our revenue and earnings guidance and achieved our margin expansion goal. Our performance this year confirms BD 2025 is the right strategy and it's working. Our results reflect our strategy in action and the focused execution and dedication of our global teams who reliably served our customers, controlled costs and increased productivity during a challenging environment. At Investor Day in November 2021, we outlined our plan to build sustained shareholder value creation in five key focus areas. Today, I'm pleased to review the progress we've made to achieve this plan. First, we delivered consistent performance and durably strengthened our growth profile. Our FY '22 results are on track with our long-range targets to deliver 5.5 plus top line and double-digit EPS growth with operating margin improvement back toward our pre-pandemic level. In FY '22, we drove 9.4% revenue growth in our base business. Additionally, we achieved our margin expansion goals in an increasing inflationary environment by both leveraging our revenue performance and realizing savings and efficiencies from several of our multiyear simplification and cost improvement initiatives. As a result, we delivered $11.35 in adjusted diluted EPS. Second, we continue to reshape our portfolio by advancing our innovation pipeline and M&A strategy towards higher-growth markets. In FY '22, we continued to transform our innovation pipeline with about 60% of our new product development invested in three market spaces that are reshaping healthcare and helping to fuel our growth: smart, connected care; enabling new care settings; and improving chronic disease outcomes. We believe our current…

Thanks, Tom. Echoing Tom's comments, we delivered strong, consistent results this fiscal year which reflects our growth strategy playing out as planned. Through execution of our BD 2025 strategy, we are fulfilling our short-term commitments while progressing towards our long-term goals. Beginning with our revenue performance. We exceeded our revenue growth expectations for the fourth quarter and full year. We delivered $4.8 billion in revenue in Q4, with base business growth of 8.6% or 6.8% organic. Parata contributed about 140 basis points to growth in the quarter and about 40 basis points to the full year. COVID-only testing revenues were $37 million, which is expected decline from $316 million last year. For the full fiscal year, we delivered $18.9 billion in revenue with base business growth of 9.4% and or 8.5% organic. COVID-only testing revenues were $511 million, which, as expected, declined from $2 billion last year. Total company base business growth was strong across all three segments with double-digit growth in BD Life Sciences and high single-digit growth in BD Medical and BD Interventional. Base revenue growth was strong regionally as well with double-digit growth in the U.S., China and Latin America, along with high single-digit growth in EMEA. Our revenue performance continues to be supported by our durable core portfolio and an increasing contribution from the transformative solutions we are bringing to the market through our innovation pipeline and tuck-in acquisitions. We also continue to benefit from the organic contribution from tuck-in acquisitions we anniversaried, which was about 20 basis points for the full year. Let me now provide some high-level insight into each segment's performance in the quarter. Further detail can be found in today's earnings announcement and presentation. BD Medical revenue totaled $2.4 billion in the fourth quarter, growing 10.2% with strong performance across the segment.…

Thanks, Chris. Our BD 2025 strategy is demonstrating strong momentum and performance positioning BD to be increasingly well positioned to drive long-term growth and value for all stakeholders and successfully navigate and differentiate in today's challenging environment. . I'd like to thank our associates worldwide once again for their tireless commitment to our purpose of advancing the world of health. And before I turn it to Q&A, I want to officially congratulate and welcome Mike and Rick to their new roles, leading the Medical and Interventional segments, respectively. Both Mike and Rick are highly effective leaders who have demonstrated strategic and operational excellence, and they're nearly two decades at BD. Their focus on driving growth and meaningful outcomes has been critical as we pursue our BD 2025 strategy, and they are well-rounded seasoned leaders with a track record of developing strong teams that deliver impactful results. Their broad experiences across multiple BD businesses and segments position them well for their new roles as we advance our growth agenda and build BD's future. With that, let's start the Q&A session. Operator, can you assemble our queue?

Certainly. The floor is now open for questions. [Operator Instructions] And our first question is coming from Larry Biegelsen with Wells Fargo.

Congratulations on a strong finish to the year. First for Chris on the top line guidance. It implies only about 4.75%, excluding Parata and testing. You just grew 6.8% organic in Q4, 8.5% for the full year. So why the deceleration in fiscal 2023? It seems conservative given the momentum. And can you talk about assumptions for pricing and those divestitures? And I have 1 follow-up.

Yes. Sure, Larry. Thanks for the question. We're very pleased with our growth rate. As you noted, I think what we're delivering is a testament to our strategy playing out, delivering consistent growth in both our durable core balanced with acceleration through transformative solutions, coupled with the actually organic contribution from the tuck-in M&A that we're starting to see as we anniversary acquisitions more than a year. There's about a 20 basis point contribution to growth. So as you noted, 9.4 this year, really strong year, in a year by the way where we actually had an increasing complex environment. Our ability to grow double digits in China as an example with some of the dynamics we saw play out there, 8.5% organic. I think there's a few things that I think will give you some color to kind of understand. Our underlying growth rate remains extremely strong as it relates to our '23 guide. If you think of it as a two-year period at 7.5% growth over a two-year period comping over that 9.4%, this is well above our 5.5-plus even if you adjust out, from an inorganic standpoint, the growth is still at about 7%. So we -- I also think it's a strong indication that we're actually consistently delivering this growth. On the strategic portfolio exits, let me give some color on that. This is a bit different. It's certainly consistent with our simplification strategies. And really, it's the strength of our underlying business and the strong growth outlook that allows us to take these strategic bold actions to create value for our customers and our shareholders. These are the kind of things that investors should want us to do, and we're very fortunate to be able to take this opportunity. It's consistent with our relentless focus…

That's very helpful. And just, Tom, one follow-up. It's been about -- the comments on Alaris were encouraging in your prepared remarks. It's been about 1.5 years since you filed. What can you share about the review process? And are you still confident you can bring Alaris back before 2025 since I think the BD '25 margin target assumes about 80 basis points contribution from Alaris.

Larry, as always, great to connect, and thanks for that question. So as we've mentioned on several occasions, getting Alaris back on the market is our #1 priority. We remain confident in the resources we've invested in our submission in the team and a leadership task to prioritize this in our process and we are confident that we will get clearance. What we also want to be -- continue to be prudent on Larry and thoughtful about the process with the FDA. And so therefore, that's why we're not predicting time lines given how inherently complex those submissions are -- as you said and as we've shared in the past, the relaunch of Alaris is included within our strategic plan as we provided at Investor Day, and there is no change to that. We just -- as I mentioned before, we want to not predict those time lines, but we are prepared for launch when that clearance comes so that we can best support our customers. And as you know, we did launch Alaris -- the new Alaris pump in Canada this past year, and we're getting very positive feedback from customers there. So thank you for the question.

And we'll take our next question from Vijay Kumar with Evercore ISI.

One, Chris, maybe I want to start with guidance and I had one for Tom. On the guidance, what -- I guess, what are you assuming for vaccine? I think vaccines were $150 million-ish of contribution in fiscal '22. Is that zero? Is that a headwind? And Alaris emergency use, is that similar to fiscal '22? Is that below? And related to that, I think in the past, you've said active discussions with the FDA, has that changed in active discussions with the FDA relative to Alaris?

This is Tom. So no, we continue to have active discussions with the FDA on Alaris. And as I mentioned, things are progressing towards our process, and we'll obviously give an update when we get ultimately clearance on that, but we don't want to try to predict the timing on that. And so therefore, again, as we have been being prudent, we haven't reflected that in our guidance specific approval timing. So we do have the same run rate of medical necessity in our guidance, which is about $100 million, same as '22. We've carried that forward into '23. And to your question on vaccines, it is a headwind in '23 that we're jumping over there. There's relatively limited vaccination demand ongoing for COVID. And so that's definitely a headwind that we're jumping over in MDS, but we have that covered.

Understood. And Tom, sorry, can you quantify what the headwind is? And related to that, sorry, my second question here. Parata, it looks like your pro forma organic here was really strong, perhaps in the teens. Maybe talk about what's driving this strong contribution from Parata. And is that part of your revenue synergies as part as the deal?

Yes, VJ. So on the hypo, we won't share the specific number there. But it is a -- there's very limited revenue, vaccine-related in hypo that we have planned for '23. Related to Parata, you're right. We have very strong performance in Parata at/or slightly ahead of our deal model on that. So we're off to a great start, and we're seeing really strong demand. And let me turn it over to Mike Garrison here, who, of course, led that acquisition when he was leading MMS and now continues to be over that as is leading the Medical segment. So Mike?

Hi, Vijay, thanks for the question on product. Parata, yes, we're very excited about Parata, also the MedKeeper, the Medbank acquisitions that are in the portfolio. They are just great teams with a passion for their craft. And it may be the things that are differentiating it in our approach, the extensive diligence we did prior to the acquisition, a real focus on culture in the first 30 days of working with the teams. And then we also set up an integration management office within MMS with some of our senior leaders to really guide and focus on each individual work stream across the functions to make sure that the acquisition goes well out of the gate. But I think the main thing is the value proposition is very strong and clear for Parata. It directly addresses the labor shortages and the clinical efficiencies that customers are seeking, especially right now, and as well as their long-term goals around smart, connected care, data-driven decision making, things like that. So it both addresses short-term needs and long-term needs, and that's why customers are reacting so favorably to it.

And we'll take our next question from Robbie Marcus with JPMorgan.

Great. Maybe to follow up on some of the '23 guidance questions. I was wondering if you could help us with some detail maybe around what you're assuming for the COVID flu combo tests. We're off to the worst start of flu in over a decade. So what you're assuming in there or just for flu in fiscal '23? And remind us where those tests ended up on sales in fiscal '22? And also, how do we think about Parata down the P&L? It's 100 bps on the top line. Just remind us of what you're assuming on the bottom line for that.

Yes. Thanks, Robbie. Appreciate it. Yes, I can take the Parata question as it relates to the margin, and then either Dave and/or Tom can maybe talk about COVID flu, how we're thinking about it. Parata, what we've shared publicly is it was immediately accretive to BD. We weren't specific with the amount. But actually, we did say it's actually even accretive to our long-range outlook, which is think of it as that about 25% from an operating margin. So it is certainly a positive contributor on the bottom line. I will just reinforce, remember, as you think of our total all in. So Parata, I think, is a great example of adding a strategic asset with a strong growth profile, strong accretion on the margin standpoint. We did have to jump over the COVID-only, which was a $300 million-plus drag on the top line that also had a higher, slightly higher margin profile. So I think when you look at our total guide at 9% to 11%, that's very strong, and we kind of reversed into the math we had shared that the COVID-only was about 300 basis points headwind in total. It implies a 12% to 14% base earnings growth profile. This is really strong, well, very consistent with what we shared at Investor Day, especially again in an inflationary environment, where we're going to have similar levels of inflation year-over-year.

Robbie, this is Tom. Good to connect this morning. We've got Dave on the call down in -- with our Latin America team at their kickoff meeting. But I'll tag Dave into the conversation here in just a moment. But related to flu combo. So we are in our assumptions, we do have that moderating a bit versus this past year, where we saw a lot of demand for the flu COVID combo driven by COVID. To your point, there is a potential. We don't see it as significant of a demand driven by the COVID side of the combo test necessarily as we look going forward in '23. Certainly, there can be a greater potential for the flu side demand and differentiating between flu and COVID. I think as you said, it's off to an early start, the flu season, still to be determined the scale of it. In Australia, we saw an early start to the season, but we saw a very narrow onetime peak in that demand. And so actually, the area under the curve was less than normal. And so there was a severe very short flu season in Australia that did not end up creating significant demand and testing because it was such a short duration still to be determined how that rolls out in the U.S., and so we want to be prudent upfront. Maybe Dave, I'll turn it to you to share some more comment here.

Yes. Thanks, Tom. And Robbie, thanks for the question. And just as I get into answering that, I just, given this is my first chance on the Q&A here, I do want to just recognize and thank the Life Sciences team globally and all the associates for another outstanding year in fiscal '22. I mean you saw the quarter growth of over 8% there, a record base growth of 13.8% for the year. So Life Sciences continues to be strong. On flu respiratory, I'll just build upon what Tom has said is, if you think about it pre-pandemic, we were always in this range right of the $75 million to $100 million, we were considering the normal flu season. I think also to remember that, that was on Veritor only. We have not really anticipated or seen a normal flu season during the pandemic at all. Definitely in October, we are seeing more visits to urgent care centers and things on influenza-like illness. But again, when you look at it, we think the season has started, it's about eight to nine weeks early. It peaked very quickly in Australia. So it's a little bit early to call what it would look like. I think if we were looking at the range for this year, based on just leverage of the Veritor installed base, we would expect that sort of that flu range of that Veritor base to be about 130 million to 150 million.

Great. Really helpful. And maybe a follow-up. Chris and Tom, 100 bps margin expansion is really healthy, given all the headwinds. Maybe you gave some good color on the slides, but was hoping for maybe just a little more details on how do we think about inflation and raw materials costs? Or any of those other headwinds? If you could put any frameworks around -- and then how do we think about FX on the operating margin line as a negative?

Yes, Robbie. Thanks. So yes, as it relates to 100 basis points, as you noted, definitely another strong year of margin enhancement. That would put us about 70% on track to deliver against our FY '25 goal of about 25%. So really strong progress, having delivered almost half of that in the first year. So not only do we feel good about what we delivered last year, continuing that momentum and driving towards our long-term objectives. Yes, there's a couple of ways to think of it. One, the predominant driver of margin improvement this year is really going to be leveraging our strong growth profile, focused on cost containment more at the operating margin level, in selling and G&A. So that's about 80% plus of that 100 basis points improvement that we're expecting. The balance is really, there's a little bit of moderating R&D back to our 6% goal. We've actually been over-indexed two years in that area. So obviously, like other areas, you'd expect to, without impacting project spend, just leverage your base with a strong growth profile, 6% is a good outcome there. The balance, which is really minor then, is in GP. So GP, you're going to kind of see that's where we're experiencing most of the inflationary impacts. As a matter of fact, you're seeing a little bit of relief in shipping. It's still above historic what we call normal levels. You're seeing some benefit there as well that's playing out mostly in the operating margin side. As it relates to where we're seeing the most inflationary pressures, it's still raw materials. It's shifted a bit more from kind of resins to other materials, such as packaging would be an example. We do have a carryover effect, too, of the inventory that was built in '22.…

That's great. Maybe just to add to Chris' comment, and it's a good question, Robbie. Back to -- we are facing, as all companies are, serious inflationary pressures, right, that are happening across the industry and all industries. I think just want to call out our plants. They're doing a phenomenal job. The last thing that we look to do in any situation is price. And so as you heard Chris walk through the order of priorities for us, our plants really have risen and almost doubled the level of normal continuous improvement that we've done historically, they've risen to that task and working to offset as much of that cost as possible. The other thing is the action that we talked about earlier around that strategic portfolio exit, as we're bringing in M&A, and we have strong underlying growth, taking this time to evaluate our portfolio and look at where they're nonstrategic products that are diluting our operational effectiveness in our plants that we can get better performance out of our lines, out of our staffing, out of our resource deployment, and take those actions set us up for strength in the long term. We're doing that this year, and that's helping us also have a role in offsetting those inflationary pressures at making us more efficient in our plants and helping make sure that we can deliver the products that matter most that we're focusing our resources on delivering those products that matter most for our customers that are going to be driving value for us and our shareholders long term.

And we'll take our next question from Matt Taylor with Jefferies.

So I had two questions. I guess the first one I wanted to ask was, I know you probably won't comment on litigation, but I was hoping you could address some of the ethylene oxide issues from two angles. One is maybe just talk about some of the things that you have done already with the regulatory agencies to work with them to mitigate risk there to improve the plans? And then any commentary you can make on litigation to get investors comfortable with that risk would be helpful.

Sure. Good question, Matt, and I appreciate it. So as you know, BD is among the world's largest producers of medical products that are critical for patient care. And our devices and products, they have to meet FDA sterilization standards. And just as background, I think everyone is aware that numerous types of devices and other sensitive medical products, for many of them, EtO is the only type of sterilization that can be used. In fact, about 50% of all medical products across the industry use EtO for sterilization. And the majority of those products that use EtO for sterilization, other sterilization methods will damage the products like radiation or steam or chloride dioxide or vaporized hydrogen peroxide, they actually would damage those products. That's why EtO is used. And you wouldn't be able to ensure the required level of sterility given the materials that are used in those products. And so we're very confident in the systems we've been investing in for decades and can say that our sterilization facilities use the best available EtO emissions control technology in the industry. We achieved more than 99.95% destruction of EtO from our stack admissions. And in accordance with the broad FDA challenge, we continue to invest in cycle optimization and EtO technology upgrades, extending outside of our plants now. And so we take the safety of our associates and the communities we're in very seriously and therefore, have a long history of proactively upgrading our emissions control technology supported by continuous investments back to your good question. So if you go all the way back to -- even let's go back to 1997. We proactively upgraded our emissions control equipment in Georgia to thermal oxidizers all the way back then and began routing back then exhaust in Georgia to the primary emissions control equipment. It's something that still isn't necessarily routine across the industry today. We're at the forefront of that. Today, we have programs and procedures in place to ensure compliance with all applicable regulatory requirements, including EPA, OSHA, state environmental protection agencies, FDA. Our facilities are at least 20x more efficient at removing EtO per cubic meter of air than what's currently required by the Clean Air Act. And we're working with the FDA and other industry leaders to develop, look at new sterilization cycles that could even take emissions down further than what's ever been possible before. Just as it relates to our outstanding litigation, there are no new cases that have been brought since the third quarter, and we have not taken any accrual in connection with any of the outstanding EtO cases. We've gone through a rigorous process internally and externally, and we do intend to vigorously defend any such cases, given our strong position in the way that we operate.

And we will take our next question from Josh Jennings with Cowen.

Probably two for Chris, just on Alaris. I was hoping to just review just the run rate of Alaris revenues in the U.S. on medical necessity shipments and where premediation or remediation, that revenue run rate sat? And also I want to just think about what you're absorbing on the margin side without -- assuming that Alaris is not going to be back in play in the U.S. in fiscal '23, what was the margin drag in 2022 and that there is a margin drag in '23? And just how you're maintaining the structure of Alaris franchise to be ready for launch once remediation is over and you're able to fully commercialize again?

Yes. Thanks, Josh. Appreciate it. Yes. So I'll just -- I'll share some things that we've shared in the past. One, from a total sales point, we had always talked about that business being roughly $400 million is the way to think of it. From a medical necessity standpoint, we've talked about $100 million per year. That's what we had last year roughly, and we're planning sort of consistently this year. So that gives you that kind of frame as you think of the size. I will remind you when upon clearance, you would expect a gradual ramp over time. We have not shared a specific timeline that's hard to predict. But maybe just to give a little context, some folks have sort of asked like, okay, are we talking less than a year-over-year. It wouldn't be less than a year, it would ramp up over some time frame, probably over a 12-month period that should help you a little bit. But certainly well within our LRP time period. Margin, we haven't shared specifics by year. What we did share, if you go back to the deleveraging that occurred from our FY 2019, there was about an 80 basis point headwind to our margin. And it's -- that largely stays the same, and we'll adjust as the product comes back. If you think of it, we -- one, we made investments in regulatory quality, of course, we maintained our service and field organization. And so as the sales come back, you would get natural leveraging to occur as we've made those investments to continue to support our installed base and customers.

And maybe just 1 other thing to add, Josh, is, as Chris mentioned, so we kept our commercial team. We kept our service team, which as we relaunch again, we'll see the positive flow through since those expenses are already on the P&L and the recovery of that. That 80 bps of dilution that we currently have on the P&L. Just on there is a benefit that we're seeing right now is we're seeing very strong demand on other capital areas within MMS, particularly in the Pyxis area, where we're able to utilize some of those additional service capabilities that we have to actually help us in the installs on the Pyxis side, and maybe since we have Mike here today who again was recently leading that business, maybe Mike, if you just want to comment on some of the broader demand we're seeing on the capital side on the MMS.

Yes. Thanks, Tom. Even though there's a -- we recognized a tough economic environment, the uncertainty there, we're not experiencing the same degree of capital pressure that maybe have been communicated elsewhere. In fact, we finished Q4 with a record year for bookings, have a strong implementation schedule planned for, and I think there's a couple of reasons for that. One is the strategy continues to resonate with the Connected Med Management Solutions, again, addressing the labor shortages and our ability to flex and implement both with business model, but also these highly skilled service, a lot of ex-nurses, ex-IT people. These are people that our customers are increasingly seeing the value of partnering with us because we can flex to meet their needs. So both of those things, I think, are really helping, and we're getting a lot of utilization out of the infusion side of the business.

We'll take our next question from Matthew Mishan with KeyBanc.

Just a clarification for me. I think last quarter, you said that you would expect some organic revenue growth around like 5.5-plus percent base growth, not including Parata. At that time, were the strategic electrics included in that number? Or are those new? And if they were included, does that mean that there was a little bit of softness over the last three months versus what you were thinking?

No. I appreciate the question. Yes. No, that hadn't been contemplated at that point. Again, we took a hard look at our portfolio in the spirit of simplification. This is different from our core Recode program that has a different lens. Similar principles, but a very different lens in terms of a pure exit. We really wanted to make sure we were focusing on our organization in higher value-creating areas. And so this was an add. And again, I think there's so many puts and takes across the year. Looking at this two-year metric, however you look at it, 7-plus percent growth on an organic basis is extremely strong. And we think this is an appropriate action to think we could easily put that back in, right? And our base growth would go up by 100 bps, but this is the right thing to do for all stakeholders over the long term. And we'll be creating significant value and has not impacted our bottom line performance at all.

And they're onetime in nature?

Yes.

We'll take our final question from Rick Wise with Stifel.

Tom, you highlighted multiple times your focus on -- among other things, on transformative solutions, M&A, the portfolio. And you and Becton's excellent Chief Financial Officer, both highlighted the balance sheet strength as maybe I think the language was new lever right now. What's your sense of urgency on the external technology M&A front? How do you view your current opportunities? And does the collapse in med tech valuations and multiple compression, does that present more opportunities? Just how are you thinking about it?

Great question, Rick, and great to connect. So -- and I agree, we have a very strong CFO, by the way, as well, too. But so we do have a very strong funnel, and we continue to be very focused specifically on tuck-in M&A. No change to our strategy there, as we've articulated many times. We're going to continue to focus our M&A as we have over 95% of our M&A to date has been in those transformative solution categories, as you called out, smart, connected care, enabling the shift to new care settings and improving outcomes in chronic disease. We've also shared that expect more Parata like in size tuck-in M&As as we look forward. So it may not be -- we've done 19 in the last 2.5 years, maybe fewer deals going forward, but of larger scale and impact, given the benefits that we have and the execution that the businesses are focused on and the ones that we've done to date. I'd say that the other thing is we're going to continue our very disciplined approach to M&A. Really proud of the team, not just for the deals that we've done, but from the deals that we've walked away from. That's something we've -- we're really pleased with, the work that we've done and how our deals are executing to plan and the return that they're delivering for our shareholders in a meaningful way. And so we're going to keep that discipline as well. But we do see opportunities will continue to be paced and appropriate about it as we go forward and staying very true to advancing our strategy, continuing to move us into those higher-growth markets. And you see us being very active. One of our portfolio management, not only through M&A, but obviously, completing the spin of Inventor earlier this year and some of the very targeted onetime portfolio exits that we shared today that are basically puts and takes with the inorganic growth that we see coming this year.

Yes. And maybe just one final one from me. I thought it would be interesting to hear from Mike and Rick, since you throw them under the bus a little bit by mentioning their names, Mike, in your new role at BD Medical and Rick on the Interventional side, the boss just said growth and meaningful outcomes is a priority. But I'd be curious to hear about your key priorities and when we speak this time next year, what are your priorities for this year? And what should we expect to see over the coming year? We can pretend Tom is not listening.

Thanks, Rick. This is Mike. Yes. So the -- my priority is the same as it was in the MMS role, is that getting Alaris back to market. It's a top priority for the company. And so it remains my top priority. Beyond that, a lot of it has to do with making sure that our innovation is productive, that dollars that we're spending in R&D get value out to customers. And because innovation that never makes it to a customer isn't productive at all. I think that constantly creating a culture where we're developing and coaching our talent to be better each day and have a continuous improvement mentality. I think that's really critical, especially in the current environment, the same way that our customers are facing labor pressures, we are, too. And so if we're the best place to work and people feel that they can belong a greater purpose that we provide, I think that's really, really important. And then finally, I think that there's just an approach to leadership that I hope that we have a performance-based culture of commitment. So whenever we make a commitment, we meet the commitment and we keep our mindset around that. So maybe a bit of a lean processes, but in an abundant mindset would be the way that I think about it. And I'm really -- last thing is Rick actually interviewed me and hired me 18 years ago. So everything I have, I owe to Rick. So thanks, Rick.

Too kind, Mike, thanks. So Rick, thanks for the question. So as I round out pretty much 60 days in the role, I'm truly inspired by the opportunity that we have in BDI to collectively enhance patient lives. So innovations like PureWick, Phasix, Venovo, just to name a few, are truly life changers for patients. And then also, as I go around the business, the commitment, the capability of the team, from our salesperson, R&D, manufacturing technicians in the plants, doesn't matter. Everyone is really focused on the patient. And so first, as Chris mentioned, and we had a great year, right? BDI grew at 7.1%, which is at the high end of our long-range plan. And again, as we said, our commitment there for next year is right there again. So we're on track for that long-range plan. So my priority is keep driving these innovations, keep meeting our commitments as a segment and continue to have a difference in chronic disease treatment and then on the associates within BD and then all the customers that we serve. So really a great opportunity, and I appreciate the question. Thanks.

I think, Rick, maybe just to share one of the other things is, as we said, within the quarter, we saw some backorders in BDI. One of the things that I know, Rick, just you're focusing on helping the team is bringing some of the operational excellence from having led MDS for many years, bringing some of those capabilities from the broader BD operating side into the BDI segment. And maybe just a couple of comments there because that's a big focus.

Great. No, I think we have a great opportunity to improve the supply chain to give an example of the ERP system upgrade, finally, bringing in fully integrating BDI into the beauty system as well. These are going to provide efficiencies to hold deliver products to our customers reliably, on time and things like that. So again, I've spent a lot of my time first off in BDI, looking at opportunities that we can continue to streamline things, drive operational effectiveness. Exactly. So thanks, Tom, for that.

The great benefits of obviously being able to rotate talent across diverse groups of businesses. And I think Rick's background, as everyone knows, MDS is probably the most operationally heavy business within the company, just given the billions of products we make on syringes and catheters and bringing that where the BDI businesses have been very innovation-driven and growth driven. It's a very nice complementary skill and leadership to be able to bring in those capabilities over. So great question. .

Yes. Thanks, Rick, for the question.

And there are no further questions at this time. I'll turn the call back over to Tom Polen for any closing remarks.

Okay. Thank you, everyone, for the very good questions today. I just want to take a moment and thank our team again around the world for an extremely strong FY '22, a challenging macro environment. And all of the work and sacrifice that all of our 75,000 associates around the world have made this past year to deliver for our customers and the patients that we mutually serve. Obviously, we've outlined a very strong outlook for FY '23, and we look forward to continuing to focus relentlessly on executing our BD 2025 strategy and bringing that to life. So thank you very much, and have a great rest of the day.

Thank you. And this does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day.