Summary
Boston Scientific Corporation (BSX) announced on November 15, 2018, the approval of a new global restructuring program designed to enhance operating performance and align the company's structure with market demands. The program focuses on optimizing the global supply chain network and building capabilities to support business growth, with initiation expected in 2019 and substantial completion by the end of 2021. Investors should note that this restructuring is anticipated to generate significant cost savings, estimated between $100 million and $150 million in annual pre-tax operating expenses by the end of 2022, with a substantial portion to be reinvested in strategic growth initiatives. While the company expects minimal overall impact on its employee base, some attrition and limited reductions are anticipated. The program is estimated to incur total pre-tax charges of $200 million to $300 million, with most of it expected to result in future cash outlays.
Key Highlights
- 1Boston Scientific has launched a new global restructuring program to improve operating performance and align resources with market demands.
- 2The program aims to optimize the supply chain network and enhance functional capabilities to support business growth.
- 3Expected to be substantially complete by the end of 2021, with benefits realized by the end of 2022.
- 4Anticipates annual pre-tax operating expense reductions of $100 million to $150 million by the end of 2022.
- 5A significant portion of savings will be reinvested in strategic growth initiatives.
- 6Total estimated pre-tax charges for the program are between $200 million and $300 million.
- 7Approximately $180 million to $280 million of the charges are expected to result in future cash outlays.