Mike Mahoney President and Chief Executive Officer/media/... · 1 Mike Mahoney President and Chief...

1

Mike MahoneyPresident and Chief Executive Officer

J.P. Morgan 32nd Annual Healthcare ConferenceJanuary 14, 2014

This presentation may include products that have not been approved or cleared by FDA and are not available for sale in the United States.

2 J.P. Morgan 32nd Annual Healthcare Conference – January 14, 2014

Safe harbor for forward-looking statements

This presentation contains forward-looking statements within the meaning of Section 27A of the Securities

Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be

identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend” and similar

words. These forward-looking statements are based on our beliefs, assumptions and estimates using

information available to us at the time and are not intended to be guarantees of future events or

performance. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties

materialize, actual results could differ materially from the expectations and projections expressed or implied

by our forward-looking statements.

Factors that may cause such differences can be found in our most recent Form 10-K and Forms 10-Q filed or

to be filed with the Securities and Exchange Commission under the headings “Risk Factors” and “Safe

Harbor for Forward-Looking Statements.” Accordingly, you are cautioned not to place undue reliance on any

of our forward-looking statements. We disclaim any intention or obligation to publicly update or revise any

forward-looking statements to reflect any change in our expectations or in events, conditions, or

circumstances on which they may be based, or that may affect the likelihood that actual results will differ

from those contained in the forward-looking statements.



Disclaimers

This presentation includes products that have not been approved or cleared by the U.S. Food

and Drug Administration and are not available for sale in the U.S.

All future product approval and launch dates are based on estimates of completion of

regulatory submissions, review and approval or clearance, as well as other business

considerations.

For reconciliations of non-GAAP financial measures used in these presentations to the most

directly comparable GAAP figures, please refer to the Investor Relations section of our

website at www.bostonscientific.com.



Building a winning foundation

• Building momentum: exceeding plans and expectations

• Competing in large global markets: challenging but opportunities exist

• Executing our strategic plan: accelerating sales and adjusted EPS growth

• Delivering meaningful innovation: developing a differentiated pipeline

• Leading globally: fostering a “winning spirit”



Advancing science for life™Mission: We are dedicated to transforming lives through innovative medical solutions that improve the health of patients around the world.

• Caring

• Meaningful Innovation

• High Performance

• Global Collaboration

• Diversity

• Winning Spirit

Values:

™



Interventional Cardiology

$2.18B

Cardiac Rhythm Management

$1.91B

Urology &Women’s Health$500M

Neuromodulation$367M

Electrophysiology $147M Endoscopy

$1.25B

Peripheral Interventions

$774M2012 Revenue by Business Unit

Rhythm Management

Cardiovascular

MedSurg

An industry leader; innovating in large markets



2013 highlights through 3Q

• Established a leaner global operating model

• Raised financial guidance: revenue and adjusted EPS

• Grew faster than the market in 5 of 7 business units*

• Advanced new adjacency pipeline

• Closed acquisition of Bard EP (November 1)

• Strengthened employee engagement

The turnaround is ahead of schedule and building momentum

*Source: BSC estimates



Investor Day Guidance

2013

Q3 Earnings Call Guidance

2013

Investor Day Goals

2014- 2015

Investor Day Goals

2016 – 2017

OperationalRevenue* (2%) to 2% +0.8% to 1.5% Low-single digit Mid-single digit

Adjusted Op. Margin* 18% to 19% Improve by

+100 bps annuallyImprove by

+100 bps annually

AdjustedEPS* $0.64 to $0.70 $0.69 to $0.71 Mid – High

Single digit growthHigh Single – LowDouble digit growth

AdjustedFCF* Strong cash flow Strong cash flow Strong cash flow Strong cash flow

2013 ahead; driving toward long-term goals

*Source: BSC estimates. All numbers are Non-GAAP and exclude goodwill and other intangible asset impairment charges, acquisition and divestiture-related net credits, litigation, and restructuring-related charges, discrete tax items and amortization expense. For reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please refer to the Investor Relations section of our website at www.bostonscientific.com.



Portfolio mix improving

2012 Revenue Mix $7.2B*

Adjacencies0.4%

MedSurg / PI40%

IC/CRM58%

EP2%

Adjacencies13%

MedSurg / PI40%EP

4%

IC/CRM43%

2017Estimated Revenue Mix**

Revenue growing and mix shifting into faster growth markets

* Net of $122M of revenue from divested businesses.** Source: BSC estimates



Adjacencies to contribute

meaningfully to growth

EXPANDInto High Growth

Adjacencies

Emerging markets to grow from 8% to 15% of revenue by

2017*

DRIVEGlobal

Expansion

Operating margin** projected to

improve from 19% to 25% by 2017

FUNDThe Journey

to Fuel Growth

New commercial capabilities to help teams deliver plan

DEVELOPKey

Capabilities

STRENGTHENExecution to Grow Share

Core growth to continue to improve

Strategic imperatives

*Growth rates are on a constant currency basis. **Adjusted operating margin.Constant currency growth rates and adjusted operating margin are both non-GAAP financial measures; for reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please refer to the Investor Relations section of our website at www.bostonscientific.com. Source: BSC estimates



Hospitals Helping hospitals reduce re-admissions and costs

Patients Improving outcomes, expanding access and saving lives

Physicians Offering new alternatives to help patients

PayersDemonstrating effectiveness through extensive evidence-based clinical research

Delivering value to multiple stakeholders



Potential WW S-ICD Market: +$750M* 2013:

• Innovation Prix Galien Award Winner

• Strong safety and efficacy data

• Gen 1.5 development complete & launched

• Implant experience ~ 3,000

2014E:

• Expanding globally

• Full supply capability

• Expanding training & trials

Meaningful innovation in CRM

S-ICD becoming the 1st choice** ̶ protection without touching the heart

S-ICD®

*Source: BSC estimates **In indicated population



WW Est. ICD Market: ~$7B*ACUITY™ X4 QUAD LEAD

• Broadest tiered portfolio

• Acuity X4 next gen quad lead: 17 pacing vectors• New Autogen ICD & CRT-D platform• World’s smallest and thinnest devices• Extends longevity advantage

• 2014E Roll-outs and trials

• Q1:14 – EU full launch• Q1:14 – U.S. IDE approval for Acuity X4 quad lead• Mid-2014 – U.S. launch of non-quad “cans”

Meaningful innovation in CRM

AUTOGEN™ X4

New platform leverages BSC advantage of size and longevity*Source: BSC estimates



• First 32-contact & multiple lead platform

• Independent current control

• Engineered for maximum coverage & flexibility

• Designed to deliver therapy more accurately

• 32% Y/Y growth Q3; 20% Y/Y growth YTD Q3**

WW Spinal Cord Stimulation Market ~$1.4B*

PRECISION SPECTRA™

Meaningful innovation in Neuromodulation

Driving share gains and market growth in Spinal Cord Stimulation*Source: BSC estimates. **Growth rates are on a constant currency basis. Constant currency growth rates are non-GAAP financial measures; for reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please refer to the Investor Relations section of our website at www.bostonscientific.com.


15

Promus PREMIER™

CUSTOM ARCHITECTURE• U.S. launch Dec. 2013• Enhanced delivery• Premier outcomes

SYNERGY™*PROMUS Element™

Strength. Flexibility. Visibility.

A New Standard Plus

BIO-RESORBABLE• Targeted 90-day drug &

polymer absorption• Designed for optimal

healing

Meaningful innovation in drug-eluting stents

Tiered offering enables improved market segmentation

*The Synergy™ stent system is CE Marked in Europe. In the U.S., this device is investigational and not available for sale.J.P. Morgan 32nd Annual Healthcare Conference – January 14, 2014



Market expansion with differentiated portfolio

Alair®

Over 350 accounts worldwide

Watchman™

Awaiting U.S. & Brazilapprovals;

approved in China

Lotus™

Expanding in EU;U.S. IDE submission

anticipated H1:14

Rhythmia™

Launching in multiple geographies

Vessix™

Finalizing U.S. IDE clinical program

Deep Brain Stim

IDE trial began 2013; 1M Americans with

Parkinson’s Disease

Significant clinical advances made to accelerate long-term growth Note: In the U.S., the Watchman™ LAA closure device, Lotus™ percutaneous valve, Vercise DBS system, and Vessix™ system are investigational devices and not available for sale.



• Designed to reduce stroke in AF patients**

• Positive FDA panel December 2013

• Most studied LAAC device and only device with long-term clinical evidence

• Launched in 40 countries; >7,000 implants

• FDA approval anticipated 1H 2014

Potential WW LAAC Market: +$500M*

Watchman™: Left Atrial Appendage Closure

Meaningful innovation and a key growth driver

*Source: BSC estimates**In indicated population. The Watchman™ LAA closure device is an investigational device and not available for sale in the U.S.



WW Est. EP Market: +$2.5 Billion*

• Offering a new comprehensive portfolio

Rhythmia: Next gen mapping and navigation

BARD EP: Recording devices and catheters

BSC EP: Therapeutic catheters

• Expanding global commercial capabilities

• Leveraging Rhythm Management synergies

Revitalizing franchise in high growth EP market

Becoming a stronger player in a fast-growing market

*Source: BSC estimates



2013 3Q YTD BSC Revenue

U.S.46%

International39%

2017E

International38%

U.S.47%

U.S.52%

International40%

EmergingMarkets

8%

EmergingMarkets

15%

2013 3Q Highlights

• Global operating units

• BSC emerging markets grew +20% Y/Y*

• BSC BRIC grew ~30% Y/Y*

• New capabilitiesin Emerging Markets

Driving global expansion

BSC Revenue

Emerging Markets becoming a meaningful growth driver

*Source: BSC estimates. Growth rates are on a constant currency basis. Constant currency growth rates are non-GAAP financial measures; for reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please refer to the Investor Relations section of our website at www.bostonscientific.com.



• Deliver revenue commitments per plan

• Improve OI contribution of new adjacencies

• New products with accretive margins

• Value initiatives and restructuring

• Lower SG&A with a focus on CRM

• Reduce corporate infrastructure0%

5%

10%

15%

20%

25%

30%

2012A 2017E

Operating Margin* Expansion

Significant opportunity to improve margins

*Adjusted Operating Margin is non-GAAP and excludes goodwill and other intangible asset impairment charges, acquisition and divestiture-related net credits, litigation, and restructuring-related charges, discrete tax items and amortization expense. For reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please refer to the Investor Relations section of our website at www.bostonscientific.com.



Capital Allocation

• Targeted balance2: stock buyback and acquisitions

Focus on growth adjacencies

Near-term revenue adds

Return cash to shareholders

• Maintain flexibility

Litigation / tax contingenciesAdjusted FCF1

through 2018

$7.5B+

Q3 2013 Cash on Hand

$0.5B+

Strong Cash Flow

Balanced approach to capital allocation

1 - Adjusted Free Cash Flow excludes any potential amounts related to acquisition-, divestiture- and litigation-related items, significant tax audit settlements and restructuring and restructuring-related items. For reconciliations of our non-GAAP financial measures, please refer to the Investor Relations section of our website at www.bostonscientific.com.2 – Subject to business development opportunities, market conditions, our stock price, regulatory trading windows, and other factors.



Building a winning foundation

• Building momentum: exceeding plans and expectations

• Competing in large global markets: challenging but opportunities exist

• Executing our strategic plan: accelerating sales and adjusted EPS growth

• Delivering meaningful innovation: developing a differentiated pipeline

• Leading globally: fostering a “winning spirit”



Changing Lives Through

MeaningfulInnovation

2014 JP Morgan Healthcare Conference


Mike Mahoney President and Chief Executive Officer/media/... · 1 Mike Mahoney President and Chief...

Documents

Transcript of Mike Mahoney President and Chief Executive Officer/media/... · 1 Mike Mahoney President and Chief...