Haemonetics at Goldman Sachs Conference: Strategic Growth and Challenges

On Monday, June 9, 2025, Haemonetics Corporation (NYSE:HAE) presented at the Goldman Sachs 46th Annual Global Healthcare Conference, outlining its strategic vision and performance. The company, a leader in plasma apheresis, discussed its achievements and challenges, highlighting both positive growth trajectories and areas requiring attention.

Key Takeaways

• Haemonetics is on track to meet its Long-Range Plan (LRP) goals with a projected revenue growth of 10% and EPS CAGR of 28% by FY26.
• The company emphasizes diversification into blood management and interventional technologies, with a focus on sustaining growth in key segments.
• Haemonetics aims to transform its portfolio, reducing reliance on the blood center business and boosting hospital segment contributions.
• The plasma business, despite temporary pullbacks, is expected to maintain growth through technology adoption and market share gains.
• Haemonetics plans a new three-year LRP targeting top-quartile performance in the med-tech sector.

Financial Results

• LRP Performance:

- Revenue growth on track for 10% over four years.

- Adjusted EPS CAGR expected in the mid-twenties, excluding CSL.

- Operating income margin projected to expand by 800-900 basis points, reaching 26-27%.

- Cumulative free cash flow anticipated to exceed $600 million, with a conversion ratio above 70%.

• FY26 Guidance:

- Revenue guidance at $1.3 billion.

- EPS projected at $4.85, a 28% CAGR over four years.

• Plasma Business:

- Gross margin in the mid-fifties.

• Hospital Segment:

- 12% growth last year, contributing nearly 50% of corporate revenues.

• Operating Margin:

- Current margin between 26% and 27%, with a target to exceed 30% in the future.

Operational Updates

• Portfolio Transformation:

- 85% of revenues now stem from core products in plasma and hospital platforms.

- Blood center business reduced from 50% to 15% of revenue.

• Hospital Segment Drivers:

- Blood management technologies grew in the mid-twenties, driven by US execution.

- Vascade closure products, including MVP and MVP XL, grew 26% and 28% last quarter.

• Vascular Closure:

- Total Addressable Market (TAM) of $2.7 billion, with $1.1 billion in the US.

- Expected 8.6% growth in EP procedures by FY26.

- Current penetration rate at 15%.

Future Outlook

• New LRP (3-year):

- Aims for top-quartile med-tech performance.

- Targets high single-digit revenue growth and double-digit EPS growth.

- Hospital gross margins projected north of 70%, corporate margins above 60%.

- Combined operating income margin expected to exceed 30%.

• Growth Strategy:

- Focus on innovation and organic investments.

- Disciplined M&A to expand presence in attractive markets.

- Expected to outperform market growth rates by 200-300 basis points.

• Plasma Business:

- Anticipates mid to high single-digit growth.

• Interventional Technologies:

- Continued double-digit growth, especially in EP with AFib.

Q&A Highlights

• Systemic Risk in Plasma:

- Customer concentration with four major clients.

- 90% geographic concentration in the US.

- Capital investments are held on Haemonetics’ balance sheet.

• Vascade Strategy:

- Building clinical evidence and indications.

- Reducing ambulation time and enabling same-day discharge for AFib patients.

- Targeting procedures done without advanced closure techniques.

• Atune Acquisition:

- Described as "potentially the right deal at absolutely the wrong time" due to faster PFA adoption.

- Focus on clinicians using RF with PFA or standalone.

• Dependency on Other Categories:

- Strategy relies on growth in categories influenced by external factors.

- Emphasis on access and closure needs regardless of therapy type.

For a detailed insight into Haemonetics’ strategic plans and financial performance, refer to the full conference call transcript below.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference:

David, Analyst: This morning, it’s been a we were just chatting that it’s been a while since we last had an opportunity to connect when I think it was right when you took over the first analyst meeting that you hosted at Humanetics, and it’s certainly been a journey since your period as the CEO. And now you’re coming up on the milestone of the end of your kind of four year LRP, and you laid out some of the dynamics of where you thought you were going to land on your FY ’twenty six guidance call and presented some of that information. But maybe give us some reflection on, as you come to the end of that period of time, how you

Unidentified speaker, CEO of Haemonetics, Haemonetics: how what the look back is gonna be. Great. Great. Thanks, David. Just, it’s been more than a decade since, Haemonetics has attended this conference, so thank you.

We’re delighted to be here and have a chance to tell our story. And I’m excited to reconnect with you given how you spent a good bit of your time in off as an operator at Baxter and Acuitas Medical, and I’m sure that helps add perspective to the work you’re doing at the bank today. So it’s all great. Before I begin, a quick reminder, my remarks will include forward looking statements, non GAAP financial measures. Usual safe harbors apply.

I’m excited to answer your question about the LRP and our our performance because we’re delivering fully. But I’m gonna maybe take a half a step back because I think our story can be complicated, particularly for folks that are new to it. And the way I would summarize it is as follows, which is, you know, heminetics is the undisputed global leader in plasma apheresis, which we view as a durable source of EBITDA, and we think that there’s tremendous potential for that business going forward. But there’s also systemic risk that’s difficult to mitigate. So we’ve attempted now to diversify into blood management technologies and interventional technologies, are attractive med surg markets where world class companies are advancing the treatment of chronic disease with favorable reimbursement.

We’re able to thrive in those markets by concentrating on what we describe as therapeutically agnostic, enabling tech that’s not being pursued by the companies that are driving the growth in procedures. And that’s really the story behind our portfolio evolution and how we’re transforming our company and our operating model, around operational excellence and superior results. In short, you know, we’ve built a $600,000,000 med surg business growing well into the double digits while we grow our corporate earnings meaningful, you know, double digits as well. That’s that’s a pretty rare entity, and I think our success in plasma has helped enable it. With regard to the specifics on the LRP, yeah, we set a a bold and audacious set of goals.

We said we’re gonna grow, 10% over that four year period. We’re gonna have mid twenties adjusted EPS CAGR, excluding CSL, that we’re going to grow our operating income margin 800 or 900 basis points over a four year period to the high 20s. We got it for 26% to 27% a month ago. And a cumulative free cash flow in excess of 600,000,000, with a return to our historically high conversion ratio. And our CFO commented on the last call in May that we expect that conversion ratio of free cash flow to net income to be in excess of 70%.

We’re on track to deliver all of that today.

David, Analyst: So I now because you’ve added some things, have to go off script here a little bit. But when you talk about systemic risk in the bloody Farisis business, is that has to do with sort of the volatility in contracts like the CSL dynamic? Is that I know the whole blood business you are you’ve exited. But on core plasma collection business, is that the dynamic that you’re highlighting?

Unidentified speaker, CEO of Haemonetics, Haemonetics: For core plasma apheresis, the real exposure is customer concentration. There are 14 customers worldwide, four of whom really drive volumes. The business has an added systemic risk, is concentrated 90%, at least for source plasma, here in The US. It’s a great market. The remuneration is outstanding, but it’s a concentration.

It’s also a unique business model where the capital sits on our balance sheet. We found ways to drive superior return on invested capital in that model. But the combination of those things and there’s really nothing you can do to mitigate them.

David, Analyst: Right. And as you fast forward to the end of this year, do you have a sense of like what the business will look like from a mix perspective between hospital, interventional, blood when you kind of get to the end of the LRP and when CSL is out of the numbers? Yeah.

Unidentified speaker, CEO of Haemonetics, Haemonetics: We’re going to do an investor date later this year. We’ll break this all down. But we’re we’re living with what is now a transformed portfolio. Fully 85% of our revenues and at least a % of our growth come from a small group of core products in plasma and those hospital platforms. When when you last covered this stock, that number was you know, part of that didn’t even exist.

You know, the blood center business alone was approaching 50%. Today, it is 15. So five zero to one five. That’s a conscious decision to hyperfocus on these attractive, fast growing markets.

David, Analyst: And are you going to issue a new LRP at the time of that investor meeting?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yeah. We expect to. And there’ll be some very familiar themes, and there’ll be some new themes. And and things that aren’t gonna change is the leadership in plasma and the commitment to profitable growth in the hospital segment. We’ll continue to focus on innovation, organic investments in particular, but some disciplined M and A as well that we can further expand our presence in those attractive markets I mentioned earlier.

You know, we we see meaningful opportunity to continue and accelerate both top and bottom line growth even off of, you know, where we expect to finish this year. So I don’t wanna, you know, give away all of our dry powder for that meeting, but if I were to paint a a broad picture aspirationally, we expect to deliver fully into the top quartile of of med tech performance. So high single digit or better growth in revenue, double digit or better EPS growth, and typically, the two to one ratio is something we aspire to. You know, our our hospital gross margins will be north of 70%, corporate gross margins will be north of 60%, and our combined operating income margin should be north of 30% with robust free cash flow and a healthy conversion. But we’ll put the flesh around that later this year and try to make that clear for folks.

David, Analyst: I have to try to get a little more out of you. That type of high single digit revenue growth, how do you think that will compare to where the markets you serve are growing?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes. I think we can outperform the underlying market growth rates, right, the weighted average growth rates, because so much of what we do is underpenetrated. So plasma is is probably the most closely watched and close matched. We expect to see mid to high single digit growth there. We can do better than that because we’re advancing new technology that has clear value to our customers, so there’s a price premium.

But the near to intermediate term, the share gains we’re experiencing will really propel us. If I think about interventional technologies, particularly in EP with AFib, you’re going to see continued double digit growth, and we still are only penetrated half of the accessible market. So we’ll have utilization on top of that. And then TEG, we joke, is the oldest launch product in med tech. But here, in its approaching its third decade, we are still less than 25% or 30% penetrated in its use cases with the robust R and D pipeline to broaden the shoulders of that.

So we expect to grow, for sure, high single digits across them because of the opportunities that are in front of us, and that’s probably 200 to 300 basis points above market growth.

David, Analyst: And I want to go into the segments in a second. But as you think about that ability to sustain above market growth, you are going into categories that require more sales and marketing that I think the legacy Plasma business, more R and D intensity, more feet on the street. How do you think about continuing to grow earnings at the rate that you just referenced while making the necessary investments to support that growth?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes. Our story, the 800 to 900 basis points of margin expansion, which at the risk of belaboring it, when you last covered the stock in FY sixteen, the gross margin was in the low forties, 43%, if memory serves. Very high fifties. Yeah. We’re we’re now into into the high fifties and pushing beyond.

Our operating income was 13%. Today, you know, if we get if we double that, we’d view that as as performance. So from our vantage point, we do think there’s an opportunity to continue to invest purposefully. Organic growth is our biggest priority. We like the R and D pipeline that we’ve put forth.

We’re probably going to lean into that a bit given the opportunities that are within reach for us now. Our second vector has been M and A with tuck in acquisitions. We’re digesting the most recent acquisitions. I’m sure we’ll talk about those in a moment. But from our vantage point, we’re going to dial that back and really concentrate on delivering value in those assets.

Our story to date has largely been mix driving gross margins. There’s been meaningful productivity. There’s been meaningful price, but it’s largely a mixed story. What you’ll see in the second half of this year for us and beyond is an increasing return on operating leverage where the sales force and the clinical investments we’ve made will begin to scale and give real outsized returns there as well.

David, Analyst: And just a last one on the impending LRP. Sometimes with these LRPs, they’re laid out for us and then you get some caveat like, oh, it’s going to be lower in the first year and it’s going to scale throughout the forecast period. Or the first year, we won’t show this margin expansion, but don’t worry, it’s coming in the future. How should we are there any sort of considerations you want to make sure you get in front of people before you lay it out formally?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yeah. I think for this LRP that we’re completing now, the fourth year of it, there was definitely it did not come linear, right? We had just at the time, we expected a rapid transition of CSL. It it took three years. That was fantastic.

We had the windfall of that in terms of our our cash flow, but it really hampered margin expansion. As things evolve, it gets cleaner from this point forward. I think we have much more line of sight and control over the growth that comes. Our expectation is that we’ll guide for a three year LRP rather than a four. We’ll talk about the beginning and the end, but the reality is we expect it to be much more controlled and and purposeful given where we are.

The way we talk about it internally, we have a base case. This is, you know, hand on heart what works to deliver, and there there’ll be a range, call it six to 8%. On top of that, we’ll do risk adjusted opportunities. So we fund them, and it’s reflected in our margin, but we don’t put the revenue in necessarily because they’re higher risk bets where we’re relying on third parties, regulatory, whatever to you know? But that ought to add a couple hundred basis points on top.

And then for us, it’ll be the tuck in m and a on top of that, which should be another one to 200 basis points of growth. Again, we’ll try to be very transparent about that. It won’t be linear, but it’s not going to be a hockey stick where you have to wait till year three to see the results.

David, Analyst: Got it. Okay. Well, we’ll look forward to tuning into that when the event is announced. Maybe we’ll jump into some of the businesses here for a second. You talked a little bit about the hospital segment that grew 12% last year.

Maybe help us unpack some of the underlying drivers there and how we should think about sustainability.

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yeah. I think, again, it’s driven in equal parts by blood management technologies and interventional technologies. IBT gets all the headline because it’s such a robust market and there’s lots of really interesting things like the adoption of PFA that are creating, you know, kind of positive and and negative, flows that people wanna get under. But I’ll start with BMT. And for BMT, you know, it’s really a focus on hemostasis management.

And while it’s a global product and we’re doing quite well outside The US, we expect to do increasingly better there, it’s a story of US execution on utilization. And we you know, that product grew, mid twenties last year on the back of the heparinase neutralization cartridge introduction. It’s helping us convert existing TEG 5,000, the legacy product. It’s helping convert those accounts. It’s helping, drive additional penetration to new accounts and then just utilization, which again is still hovers, you know, well below 50%.

So it’s a trifecta on BMT. We like transfusion management. We’ll do well with Cell Saver, but it’s really first and foremost about, you know, our hemostasis management, viscoelastic testing here in The US. On the other side with IVT, it’s predominantly a story of closure. Vascade, Vascade MVP, and Vascade MVP XL, where we continue to have real success.

The latter two grew 26% last year and 28% last quarter, as we continue to ride the wave created by PFA. That’ll continue, albeit more moderately as we as we round out the adoption curve. But, again, you know, and and we we added, you know, probably six or 700 basis points of growth from Japan alone last year, but it will continue to be a story of US penetration, US utilization in particular. So those two products in The US are the mainstay of the growth there. Over on the collection side, it’s it’s really share gains and annualization of those price increases that we took last year as we completed what was a long awaited technology cycle upgrade.

David, Analyst: And I want to go in a little bit more on best case. I think there’s a ton of interest in that segment, especially given the enthusiasm around EFA. Maybe just to unpack a little bit more of the Vascades strategy and what’s contributing to that 2628% growth that you referenced.

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes. Half step back, David. You know, expect hospital will approach 50% of our corporate revenues this year. I think the guys into the, you know, mid to high forties. And so we expect to do at at least that, and, you know, is disproportionately driven by those two products.

When we look at vascular closure, we measure a TAM of roughly 2,700,000,000.0, fully 1,100,000,000.0 of which is here in The US alone. EP is by far the highest growth vector. It’s roughly a third of the total closure with with coronary and peripheral, you know, PCI being the other two thirds. But the the rapid growth in EP procedures is really exciting. Folks get a bit confused because some of the newer technologies are reducing the number of access sites.

We’ve done a full breakdown of that. In fact, there’s two pages on our investor website that we published with our last earnings call to break this down. We see the aggregate growth in the addressable market in FY twenty six for closure at at 8.6% on the EP side, 1% to 2% on the coronary side. Today, that’s 15%, one-five of what we do. We can do better than that, but the growth is disproportionately going to be on EP.

Okay.

David, Analyst: And how maybe just as you think about other players here like Abbott entering, obviously have a strong closure business. How do you stay competitive as companies like them try to come in as a they’re going to be the fourth player in The U. S? That franchise has a history of being not shy to use price as a lever, and they certainly have a very broad portfolio. How do you think about staying relevant as full service line players come into that market?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yeah. I think this is where we are benefiting from the investments we’ve already made. First and foremost, it’s to build out the indications and the clinical evidence in support of those indications. So we don’t take Abbott or or Cordis or Terumo for that matter lightly in this space. And I think the competitive dynamics are very different if we’re talking about A fib versus some of the other procedures.

You know, our value proposition established back during COVID was that, you know, MVP, when used for A fib, reduces the time of ambulation from six hours to two hours. It gets patients out of the hospital 99 something percent of the time same day. When you’re looking at the cost of an AFib procedure, and candidly, the benefit to the hospital, to be able to do those procedures without needing the overnight stay is incredibly powerful. So I think that was the value proposition that catapulted us into market leadership. Like I said, we don’t take the competition lightly, but our biggest opportunity on closure is the half of all procedures today that are done without an advanced closure.

It’s either compression or it’s suturing. And I think driving utilization in those at one level, having competition helps because it’s more word-of-mouth and and more, you know, voice in the market, making it clear there’s a better alternative. And then we go head to head, and we like our like our chances competing head to head with the available technologies.

David, Analyst: Does anyone still suture? Like what’s the penetration of closure versus suture, do you think?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes. I think suturing is probably the dominant play for the half of the market that doesn’t use an advanced closure device. There is some compression. But yes, I think for folks that were trained on suturing that have that as their backdrop, they continue to defer accordingly. We’ve got a better answer, and we need to do our part to drive the utilization there.

David, Analyst: And how about moving procedures into the ASC? This is a topic that also came up when I was with Abbott last week, and they were highlighting the potential for EP procedures to move into the ASC, the need to do more of this under conscious sedation versus general anesthesia. But it would also seem like in that environment, speed to get the patient in and get the patient out would also be a priority. Are you seeing opportunities emerge there for you guys?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yeah. No, absolutely. I think that’s and we’re not you know, individually, we don’t have the scale or the resources to drive that. This is where I think the metaphor that somebody offered when we first did the Cardiva acquisition is you guys are basically water skiing behind boats that are driven by the likes of of, you know, Medtronic and Boston Psy and Biosense and Abbott to some extent. And so as they drive into ASCs, there’s a different profit imperative, which makes the value proposition you know, we don’t give this product away.

It’s amongst our highest gross margin, but it’s a fraction of the cost of the actual procedure or the reimbursement they’ve secured against it. So if we can enable it, we we have good good play in an ASC as well as in the hospital itself.

David, Analyst: So obviously, parts of the pipeline you’re going to disclose and not disclose for all the reasons I think that people understand and then your M and A strategy similarly. But if we were to look at some of these procedures, is the right way to kind of assess where you might go next is exactly what’s hanging around the hoop? It’s in the procedure but sort of on the side of the playing field, maybe not fully in the case, I guess, is that the best way to assess where you might go next? Is that how your marketing teams spend their time thinking about where the other sort of hang around the hoop opportunities are?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes, right? We need an attractive TAM that is defined by our therapy. We need you know, a SAM within that that we believe we can capitalize on. We as I I said a moment ago, right, we’re looking at these attractive areas, but we’re therapeutically agnostic. When we pursued Opsense, we knew that the Savvy Wire was an outstanding tool to enable better valve placement.

We went and talked to the leading valve companies and said, you know, is this your interest? Because we don’t wanna waste time. And for our scale of a company, it just doesn’t make good sense to pursue something that’s ultimately not gonna materialize. And we heard back a couple things. We heard back it’s a great guidewire.

We hope you guys get it because in your hands, it will be successful. We’re not interested in it because, you know, if we have this, you know, 800 or $900 guidewire on a $35,000 valve procedure, we’re gonna be asked to to your earlier point, we’re gonna be asked to bundle it and just give it away for free. So there’s no value prop there. And then I think a more nuanced answer, which probably is also true, was we don’t want our very well compensated, highly trained clinical reps scrubbing in to use that guidewire on our competitor’s valve. It just doesn’t make sense.

So this notion of therapeutically agnostic enabling tech lets us you know, we’re on the dance floor, but we’re not getting trampled because we’re not in the way of those procedures. In fact, we’re enabling them, and we tend to get the access and the support from those other companies as well as the labs themselves accordingly.

David, Analyst: I feel like in this sort of same context, do need I do want to touch on Atune. Obviously, temperature monitoring under pressure as RF becomes a smaller percentage of total. I mean that seems to be one of the common themes here is if there is any cost savings in a PFA procedure, it is the elimination of esophageal temperature probe, which isn’t that expensive a product. But like where is that a business that you decide to wind down, defocus? Where does this fall in kind of the priority scheme for you?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Look, I think it’s important to learn both from your successes and your mistakes. I would characterize the Atune acquisition last year as, potentially the right deal at absolutely the wrong time. It wasn’t like we didn’t know about PFA. We did you know, we we took all the available information, including from the leading, PFA, therapeutic companies that were forecasting 40 to 60% growth. At the time, ATTUNE had 9% share of all procedures.

We knew that if we could essentially double that, this would be a home run-in terms of the return on invested capital. What we need for that to be true is for RF to retain at least, you know, a 30% stake in the market. And until we have clarity around that, we’re not gonna double down on that investment. We’re gonna be thoughtful about it. When you’re using RF, adding Enzo ETM is a game changer.

For a relatively modest price, it makes it completely safe. You avoid the the risk of lesions. You don’t have to do temperature monitoring. There’s no probes, and you can move fast, which is what those EPs want. So we’ll see where the dust settles later this year on PFA adoption.

In the meantime, we’re just being very surgical about, you know, kind of what we euphemistically call where’s Waldo, where Waldo is the one, you know, a clinician who wants to use RF, either in conjunction with BFA or standalone where there’s a risk of burning because they’re on the back wall. In that case, they need to be using Enzo. It’s the right technology. If we can scale that business to something north of 15% market share, we’ll still pull it out. But here and now, best I can say is right deal, wrong time.

We need to learn from that and move forward.

David, Analyst: And is it the same Salesforce carrying these carrying Basket and Atune products?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yeah. So I think for Atune, in particular, it’s all EP based. So the folks who are detailing MVP and MVP XL are well positioned to have the Enzo ETM conversation.

David, Analyst: And how do you think about that from a quota setting perspective, just to try to keep your reps focused on the right growth drivers but also not letting Attune sort of die in the bind?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes. Again, what I said earlier has to be true, which is you know, we win or lose on vascular closure in The US. The mistake we made with the acquisitions back to back was we distracted our existing team from closure, and that’s where we ceded some market share. We had a delay on the product release for Excel. Didn’t help with PFA.

So the combination of those two things put us back. We bifurcated the teams. We are hyper focused. Enzo is an add on when we know that the doctor has a tendency to use RF, but it doesn’t get in the way of the base plan. These are teams, like a company, succeed or fail on vascular closure.

David, Analyst: And I know you made the comment earlier as think about your LRP and risk adjusting different opportunities. But one of the challenges of the strategy of latching yourself to other categories is that those categories might not grow linearly either. PFA adoption is probably the fastest adopted medical device I’ve ever seen Correct. Technology. Now the other one that took this didn’t end well, if you look at coronary stents, for example Yeah.

Drug eluting stents. Right from zero to 90% penetration overnight back to 60. Yeah. I don’t know if that’s gonna happen with PFA. Just doesn’t seem that way because there’s no safety signal, which I think was the issue there.

But it also seems like it puts you in a position where you’re not totally in control of your own destiny.

Unidentified speaker, CEO of Haemonetics, Haemonetics: Admittedly, that’s true. We’re not you know, so we’re not trying to influence a choice between cryo or RF or or PFA. But, from our vantage point, what we’re observing more broadly in A fib is tremendous, you know, earlier diagnosis, more thoughtful diagnosis, and, you know, just a massive expansion in the treatable population. So from our vantage point, again, you know, we care, but we don’t really need to discriminate between whether it’s RF or PFA, whether they’re doing concomitant therapy or they’re doing stand alone therapy. The issue is, are they do they need access?

And if they do, there’s a play for closure.

David, Analyst: Okay. I wanna open up to the audience, see if there are are any questions before we kinda go to plasma and then talk a little about financials. That’s okay. It’s a fireside chat. I’m supposed to open it up.

No one ever asks any questions, but that’s okay.

Unidentified speaker, CEO of Haemonetics, Haemonetics: It’s nine in the morning.

David, Analyst: Yes, I know. I know. So just I want to close on Plasma on the top line here. Obviously, CSL is out of the picture, you’ve reduced you are losing, I think, what has historically been your largest customer, one of your largest customers.

Unidentified speaker, CEO of Haemonetics, Haemonetics: But should we think about that rebasing to like a 7% growth rate on a go forward basis, on a reported? We’ll provide more color around what we think is the underlying base when we do our Investor Day. What we look at is, you know, just a 30,000,000,000, with a b, million dollar, you know, kind of therapeutic market. So there’s tremendous growth opportunity. If you look at the forecast that the leading players, CSL, Grifols, BioLife, Takeda have put forward, they’re all talking about double digit growth of I b Ig based therapies.

So we like the long term prospects. If you go back and study this over a multi decade decade period, there are always ebbs and flows. The current, ebb is really a function of increased productivity, much of which we’ve brought to the market. Now we’ve done so at a very handsome premium on innovation, so you see that benefit in price. And this year and next, you’ll see that benefit in terms of share gains.

But we look at a number of factors. We look at the clinical trial work they’re doing. We look at the actual use case for alternate therapies like anti FcRn, which absolutely have a role. But today and probably for the foreseeable future, they’re you know, they tend to be adjunctive therapy given the price differential, which is, you know, 50 to to 70% higher. So it’s pretty clear the way the market is shaping out.

We just look you know, there’s a whole bunch of factors around, you know, rates of reimbursement, around number of new center openings. The number that seems to be a very accurate long term predictor, as you said, of that, you know, 7%, eight % is fractionation expansion, and that’s what we ultimately track to. You know? That said, you know, we we got ahead of this last year and and had to be more cautious. We were able to deliver our plan because of our share gains, but this year, we’re assuming very modest growth.

In fact, really zero to two percent, mostly backloaded. We will grow meaningfully in excess of that ex CSL. We’ve guided to 11 to 14% growth, And the reason is that is is share gains and and the continued annualization of our price increases from last year. So, you know, we’re using what we view as a very temporary pullback in collection demand to accelerate the technology adoption and share conversion. So it’s a it’s a team that’s firing on all cylinders.

If I look back three years, that plasma apheresis team has met every single objective or exceeded them over the planned period. We have no doubt they’ll continue to do so.

David, Analyst: And and would you say as you get ready to issue the new LRP that this business represents the potential driver of what could be variability across the forecast period?

Unidentified speaker, CEO of Haemonetics, Haemonetics: There’s gonna be ebbs and flows, but I think we increasingly have line of sight to be able to normalize that. You know, when we started this discussion, you know, plasma was the real workhorse. It was, you know, large, you know, more than half of our revenue and and well more than half of our EBITDA. Today, you know, our guidance for this year, plasma will be 38% of what we do. No one customer will be more than, you know, nine or or 10% of our corporate revenue.

So we’ve succeeded in the process of diversifying the business. There will be ebbs and flows, but what we really look for for this is that EBITDA, that free cash flow that we’re using to fund the more stable, more predictable growth in med surg.

David, Analyst: And I’ll close on a P and L question and turn it back to you for any closing remarks. But the you’ve seen a huge amount of margin expansion. I mean step function type improvements in your gross and operating margin. But as you look at exiting this year at a high 50s gross margin and 26% to 27% operating margin, that profile does stand out versus the rest of the space. And most companies at 26% to 27% operating margins have gross margins that are well into the 60s, if not Can you continue to see steady margin expansion without a big step up in your gross margin?

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes, absolutely. And I think part of it is understanding the dynamics really of our entire collections business, which, of course, is mostly, plasma apheresis, but it’s also plasma and platelets on the blood center side where our blood center customers are looking to replicate the success the source plasma guys have. That you know? So we’re we’re now operating well north of 50% gross margin in that business. In fact, in our 10 k filings, we tried to break this out more fully to provide additional transparency.

And I think what you can see when you look at the plasma business, it’s, you know, now mid fifties gross margin, but the pass through is tremendous. And it’s just the nature of it. And so that is sustainable and scalable. On the hospital side, it’s been, as I said, mostly a mixed story. That’s gonna transition over.

There’ll still be meaningful benefit from mix, but we’re also gonna see an uptick in productivity and operating leverage where the investments we’ve already made in Salesforce, in in clinical development, in R and D more broadly, are now scaling in in ways that, you know, will make us much more consistent with the med surg group, which in combination is what drives what you described. That’s that’s how we’re, you know, have a $600,000,000 hospital business growing double digits as part of a corporation that has delivered double digit earnings growth year in and year out. Okay.

David, Analyst: Excellent. Well, we have a couple of minutes remaining here, so I just wanted to turn it back to you to see if any wrap up or closing remarks. And again, very much appreciate you making the trip, and great to have the opportunity to reconnect here.

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yes. David, thank you for that. Think the timing is pretty critical as well. We believe Haemonetics is at an inflection point, and we think this year, fiscal twenty six, will be defining for us. You know, three years ago, as we talked, you know, FY ’22, excluding CSL, we earned a dollar 83 a share.

We were very public about that. Our actual earnings were $2.58. We said we had 75¢ of CSL. So that June, we issued this current LRP and, you know, targets we’ve talked about, double digit revenue growth, mid twenties, earnings growth, high twenties, you know, operating margin. We’re in the final year of the plan.

We guided last month for for this year’s results. We obviously don’t intend to to miss our own guidance. Now that will imply revenue of 1,300,000,000.0, which is a 10% CAGR over the four year period. It implies at the midpoint $4.85 of EPS, which is a 28% CAGR over that period. Said differently, a buck 83 to $4.85.

It is a $3 increase in EPS over the four year period, and that earnings is coming from a portfolio that is more profitable, higher growing, more diversified, and better margins than anything that existed previously. We have our challenges. We but we got a clear path forward on interventional, realigned our sales force, and and invested in clinical. We are excited about the continued momentum in with TEG success driving blood management. We, look at the technology upgrades and our leadership for US sourced plasma, and we think we’ve got more room to run there.

And margin expansion is on track with meaningful more room to go. So we think we’re executing. The strategy is sound. The portfolio and the transforming effects are there, and we’ve just we’ve got heads down delivering.

David, Analyst: Excellent. Well, with that, we are we’re just at time. And, again, appreciate your your your making the trip and look forward to, following watching the story from here.

Unidentified speaker, CEO of Haemonetics, Haemonetics: Yeah. Thanks, David. Appreciate it. You’re invited.

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