Solventum reaffirms 2025 guidance, and announces long-range plan through 2028

 Solventum (NYSE: SOLV) today hosts its 2025 Investor Day and will outline strategic priorities for the Company, its business segments, and its long-range plan (LRP) to drive growth and value creation.

"Solventum has tremendous potential, with attractive businesses, large and growing markets, and highly regarded brands. We have undertaken a significant transformation to unlock the potential of our Medical Surgical, Dental Solutions, and Health Information Systems businesses, positioning the company to drive accelerated growth and create shareholder value," said Bryan Hanson, Chief Executive Officer of Solventum.

"Solventum has entered 2025 as a more focused company with an improving innovation engine and a purpose-built leadership team committed to realizing our mission of enabling better, smarter, safer healthcare to improve lives. The recently announced sale of our Purification & Filtration (P&F) business is a major milestone and will allow us to accelerate our plans and deliver for customers and shareholders. Our long-range plan demonstrates the progress we made in the last year and reflects our confidence in our ability to accelerate sales growth, expand margins, deliver EPS growth, and improve free cash flow," Hanson concluded.

Long-Range Plan and Financial Targets
Solventum today reaffirmed its fiscal year 2025 guidance, originally provided in connection with its Q4 earnings, and announced its LRP for 2025 through 2028:

• Accelerate organic sales growth of 4% to 5% in 2028
• Expand operating margins to be 23% to 25% in 2028 (inclusive of ~200bps 3M COGS increase)
• Generate EPS CAGR of 10% over the 3-year period ending 2028
• Drive free cash flow conversion of 80%+

The Company is also focused on delivering attractive ROIC and a solid investment grade credit rating and intends to use the proceeds from the P&F transaction primarily to pay down debt. Solventum will consider share repurchases and dividends over time.

Three-Phased Transformation Plan
The Company has been executing a three-phased transformation plan, and the LRP reflects the foundational improvements implemented over the last year to position the Company for success.

• Capture hearts and minds and stabilize the business: The Company has taken action to drive mission and culture, refresh talent and harmonize the executive team, and enhance execution with a focus on relevant metrics for its business.
  
• Enhance strategic focus: Solventum is executing a clear strategic plan to drive revenue growth, margin expansion, and cash flow improvement with a focus on high-potential markets where the Company has a path to leadership. Over the past year, the Company has carefully analyzed its markets to select key growth driver areas that will propel growth across the business segments.
  
• Portfolio optimization: Solventum has identified organic and inorganic growth opportunities to maximize value and optimize its portfolio, including the recent sale of the P&F business, which frees up significant capital to invest for growth through M&A. The Company will continue to evaluate opportunities to enter or increase scale within the most attractive markets and submarkets, as well as invest in R&D and CapEx to support innovation and top-line growth.

2025 Investor Day Webcast
Solventum will host its 2025 Investor Day in New York City today starting at 1 p.m. Eastern Daylight Time. The event will also be accessible via webcast and can be found on the Company's investor relations site. A replay of the webcast and the presentation slides used will be available on the same site following the event.

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