22 nd Annual Credit Suisse Healthcare Conference. November 12, nd Annual Credit Suisse Healthcare Conference November 12, 2013.

Transcription

1 22 nd Annual Credit Suisse Healthcare Conference November 12,

2 Safe Harbor For Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words like anticipate, expect, project, believe, plan, may, 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. Except as required by law, we do not intend to update 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. 2

3 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/or 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 3

4 Our large and diverse portfolio of innovative products Our Mission: Boston Scientific is dedicated to transforming lives through innovative medical solutions that improve the health of patients around the world. Interventional Cardiology Cardiac Rhythm Management Neuromodulation Electrophysiology Urology & Women s Health Cardiovascular 2012 Revenue: $7.1B 1 Interventional Cardiology $2.2 Peripheral Interventions $0.8 Cardiac Rhythm Management $1.9 Rhythm Management Endoscopy Advancing science for life TM 1 Represents Boston Scientific s 2012 revenue excluding $122M of revenue from our Neurovascular businesses, which we sold in Peripheral Intervention $0.4 Neuromodulation $0.5 Urology & Women s Health Endoscopy $1.2 MedSurg drives leadership in our served markets $0.1 Electrophysiology

5 Large End Markets Expected to Stabilize 2012A Growth 2013E Growth E Growth E Growth IC (4%) (4%) (2%) (1%) CRV CRM (5%) (3%) (2%) (1%) EP 10% 12% 12% 11% PI 4% 5% 5% 5% Endo 4% 4% 5% 5% MedSurg Uro/WH (3%) 2% 5% 5% Neuromodulation 6% 6% 7% 8% Core Market Total (1%) 0% 2% 2% Adjacencies 30%+ 30%+ 30%+ 30%+ Total Served Market (1%) 1%+ 2%+ 4%+ 5 with Growth Accelerating from Adjacencies Source: BSC Internal Estimates

6 Strategic Imperatives Advancing science for life TM STRENGTHEN Execution to Grow Share EXPAND into High Growth Adjacencies DRIVE Global Expansion FUND the Journey to Fuel Growth DEVELOP Key Capabilities Our People: Engagement, Development, Retention Our Values: Caring, Meaningful Innovation, High Performance, Global Collaboration, Diversity, Winning Spirit to accelerate growth and enhance profitability 6

7 Rhythm management strategy is focused Comprehensive EP Product Offering WATCHMAN Rhythmia Mapping System U.S. cleared and CE Marked. S-ICD System CE Marked. In the U.S., this is an investigational device and not available for use or sale. U.S. approved and CE Marked. Next Gen ICD/ CRT-D System Completed acquisition of Bard Electrophysiology on November 1. Patient Management Device under development. Not available for use or sale worldwide. Next Gen Stim / Ablation Therapies on providing the EP a comprehensive set of solutions 7

8 Strengthening our Cardiovascular pipeline Interventional Cardiology Peripheral Interventions Synergy TM CE Marked. In the U.S., this device is investigational and is not available for use or sale. ilab Polaris Device under development. Not available for use or sale worldwide. Epic TM Iliac SES U.S. approved and CE Marked. Promus PREMIER TM CE Marked. In the U.S., this device is not available for use or sale. Rubicon 18/35 U.S. cleared and CE Marked. OffRoad CE Marked. In the U.S., this device is not available for use or sale. CrossBoss and Stingray CTO System U.S. cleared and CE marked. with meaningful innovation to grow share 8

9 Differentiated pipeline in MedSurg Endoscopy Urology / Women s Health Neuromodulation Flexiva TM TracTip U.S. cleared and CE Marked. WallFlex Transhepatic U.S. cleared and CE Marked. Next Generation Precision Spectra TM Endobronchial Ultrasound Device under development. Not available for use or sale worldwide. StarFire TM Laser Device under development. Not available for use or sale worldwide. Obtryx II TM Device under development. Not available for use or sale worldwide. to expand share and global reach US approved and CE Marked. 9

10 Expanding into new adjacencies Severe Asthma Only device to treat severe asthma 88% reduction in ER visits over five years 1 FDA and CE mark approved Hypertension Over-the-wire balloon with RF electrodes Enhanced patient safety and efficacy CE marked; projected to begin U.S. IDE trial in Q1 2014* Left Atrial Appendage Permanent closure of left atrial appendage Demonstrated stroke risk reduction vs. Warfarin CE Marked; projected FDA approval in 1H 2014* EP / Atrial Fibrillation 2 3D Image and catheter guidance Mapping system designed for faster diagnostics U.S. cleared and CE marked Transcatheter Aortic Valve Replacement Structural Heart (TAVR) REPRISE I complete; REPRISE II enrollment complete CE Marked; projected to begin U.S. IDE trial in 2014* Deep Brain Stimulation (DBS) Treats Parkinson s movement disorders 1 million U.S. adults affected by Parkinson s disease CE Marked; began U.S. pivotal study in 2013 accelerating our growth and leveraging our capabilities 1 Source: Five-year data from the Asthma Intervention Research 2 (AIR2) clinical trial. 2 We do not have an indication to treat Atrial Fibrillation in the US. 10 * Source: BSC Internal Estimates

11 Driving Global Expansion U.S. 53% 2012A Total Company Revenue BRIC 4% 2017E Total Company Revenue U.S. 50% BRIC 10% Aligned globally for growth More balanced global portfolio Building new capabilities in Emerging Markets International 43% International 40% Brazil, Russia, India and China (BRIC) growing ~30% International 41% International 41% 11 to Accelerate Growth and Establish New Capabilities Source: BSC Internal Estimates

12 Operating income improvement initiatives Gross Margin Improvements Operating Expense Improvements Reduce Product Cost Improve Portfolio Health New Products with Accretive Gross Margin Reduce Other Cost of Sales For Example: Emerging Markets Key Areas Include: Finance I/S HR Legal Clinical Trials Product Development Quality Customer Service Key Partners expand operating margins by 600 basis points over time 12

13 Improved Profitability to Drive $6.7B+ Expected Future Capacity for: $6.5B+ Acquisitions: Growth adjacencies Near-term revenue contribution Stock repurchases under $1B program Risk contingencies $0.2B Legal & tax Q Cash on Hand Adjusted Free Cash Flow 1 Estimate through 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 Continued Strong Free Cash Flow Source: BSC Internal Estimates

14 Projected to return to growth in E E E Operational Revenue* 0.8% - 1.5% Low-single digit Mid-single digit Adjusted EPS* $0.69 to $0.71 (Includes $0.04 of Med Device tax impact) Mid-high single digit growth High-single to low double digit growth Adjusted FCF* Strong cash flow Strong cash flow Strong cash flow *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 with goal of consistent revenue and adjusted earnings growth 14 Source: BSC Internal Estimates

15 Thank You 15