US-based Abbott (NYSE: ABT) released its Q4 2022 financial results last week, showing a 6.1% year-on-year (YOY) decline in global sales to USD 10.091 billion, excluding foreign exchange impacts. Over the full year, sales increased 6.4% YOY to USD 43.65 billion. Abbott Chairman and CEO Robert B. Ford highlighted the “challenging global business conditions” over the past 12 months, with Q4 performance affected by a drop in COVID-19 testing-related sales and disruptions in infant formula manufacturing at the firm’s Michigan site.
COVID-19 Testing Impact
Abbott’s global revenues from COVID-related testing amounted to USD 1.069 billion in Q4 2022, down from USD 2.319 billion in the same quarter of 2021. For the full year, COVID testing brought in USD 8.368 billion, up from USD 7.679 billion in 2021. For 2023, Abbott forecasts high-single-digit sales growth, excluding COVID-19 testing, while COVID-19-related sales are expected to drop to around USD 2.0 billion.
Business Unit Performance
By business unit, global Q4 sales for Nutrition were down 5.7% YOY to USD 1.817 billion; Diagnostics sales fell 21.3% YOY to USD 3.3 billion; Established Pharmaceuticals grew 7.9% YOY to USD 1.216 billion; and Medical Devices increased 7.4% YOY to USD 3.75 billion.
China Market Updates
In China, Abbott cited the market as a key growth driver for its Established Pharmaceuticals unit, alongside Brazil, Mexico, and India. However, the COVID-19 epidemic negatively impacted Medical Devices sales during the period. In December, Abbott announced its withdrawal from the infant formula market in China due to growing competition, with the business set to be phased out in 2023.
CEO Robert Ford, speaking during the earnings call, noted that China is an important growth market for Abbott, accounting for around 5% of global sales. He expressed optimism about China’s reopening and its potential to boost performance from Q2 2023 onwards.
Ford also discussed the impact of volume-based procurement (VBP) on Abbott’s China business. This year, the firm’s electrophysiology products will undergo VBP tendering, which is expected to have a short-term negative effect. However, Ford highlighted that Abbott’s vascular stent products, which underwent VBP tendering in 2019, have returned to pre-VBP levels. Overall, he described VBP tendering as a long-term opportunity for Abbott.-Fineline Info & Tech
