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Medtronic JP Morgan Presentation
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34TH ANNUAL J.P. MORGAN HEALTHCARE CONFERENCE
OMAR ISHRAKCHAIRMAN & CEO
JANUARY 11, 2016SAN FRANCISCO
FORWARD LOOKING STATEMENTSome of the statements contained in this program may be considered forward-looking statements whichprovide current expectations or forecasts of future results. These forward-looking statements generallyrelate to market and sales growth, growth strategies, financial results, use of free cash flow, productdevelopment and introduction, regulatory matters, restructuring initiatives, intellectual property rights,litigation and tax matters, mergers and acquisitions, divestitures, accounting estimates, financing activities,working capital adequacy, ongoing contractual obligations, competitive strengths, and sales efforts. They arebased on current assumptions and/or expectations that involve a number of uncertainties or risks. Theseuncertainties and risks include, but are not limited to, those outlined in Medtronic’s Annual Report on Form10-K for the year ended April 24, 2015, and other documents previously or subsequently filed with the U.S.Securities and Exchange Commission (SEC). Investors are advised to review any further disclosures whichmay be made in such reports filed periodically with the SEC. Forward-looking statements are made as oftoday's date, and the Company undertakes no duty to update them. In addition, non-GAAP to GAAPreconciliations are attached.
Historical Financial Data DefinitionsThis presentation refers to historical financial data that sums historical data of both Medtronic and Covidien.This data is different than the pro forma information previously included within certain SEC filings.Management believes that using these measures are a useful way to evaluate Medtronic’s underlyingperformance. All reconciliations of these measures to the most directly comparable GAAP financial measuresare attached.
Comparable Basis: Includes Covidien plc in the prior year comparison and aligns Covidien’s prior yearmonthly revenue to Medtronic’s fiscal quarters.Combined Basis: Combines Covidien’s closest reported quarter with Medtronic’s fiscal quarter in the prioryear comparison.
34th Annual J.P. Morgan Healthcare Conference | January 11, 20162
MEDTRONIC: UNIQUELY POSITIONED TO WIN IN GLOBAL HEALTHCARE
Revenue Growth: Strong execution leading to consistent mid-single digit growth resulting in above market performance
Operating Leverage: COV integration resulting in tangible and sustainable operating margin leverage at the high end of our baseline expectation of 200-400bps of EPS leverage
Capital Deployment: Disciplined capital deployment with a roadmap to increased accessible cash and dividend growth
34th Annual J.P. Morgan Healthcare Conference | January 11, 20163
Sustained Double-Digit Total Shareholder Returns Over the Long Term
Note: All references to revenue growth and EPS leverage are on a constant currency basis.
GUIDANCE UPDATE
34th Annual J.P. Morgan Healthcare Conference | January 11, 2016
REITERATING 2H FY16 REVENUE OUTLOOK; UPDATING FY16 EPS
Reiterating 2H FY16 revenue growth in the upper-half of our mid-single digit baseline range on a comparable, constant currency basis
REVENUE OUTLOOK
$4.36 to $4.40, up from $4.33 to $4.40
Reflects benefit of the permanent enactment of the U.S. R&D tax credit
Continues to include an expected $0.45 to $0.50 negative FX headwind
Implied 2H FY16 EPS leverage of over 1,000bps
FY16 EPS GUIDANCE
CAPITAL DEPLOYMENT
Net result of the capital allocations announced today are not expected to materially affect 2H FY16 net interest expense, net earnings, diluted weighted shares outstanding or diluted earnings per share
4
1
1 Constant currency.
CONSISTENT STRATEGIES DRIVING GROWTH VECTORS
TherapyInnovation
Globalization
Economic Value
34th Annual J.P. Morgan Healthcare Conference | January 11, 2016
MEDTRONIC STRATEGIES
UNIVERSAL HEALTHCARE
NEEDS
Improve Clinical Outcomes
Expand Access
Optimize Cost and Efficiency
SOURCES OF GROWTH
Growth Vector #1New
Therapies
Growth Vector #2Emerging Markets
Growth Vector #3Services and
Solutions
Operational Execution
+150 to 350bps
+150 to 200bps
+40 to 60bps
5
FINANCIAL MODEL
Reliable, consistent mid-
single digit growth
EPS leverage of 200-400bps
Return a minimum of 50% FCF to shareholders
Note: All references to revenue growth and EPS leverage are on a constant currency basis.
CREATING LONG-TERM SHAREHOLDER VALUEIMPROVING REVENUE, EPS AND FREE CASH FLOW GROWTH
NON-GAAP EPS2
ADJUSTED FREE CASH FLOW3
$3.00$3.50$4.00$4.50
FY11 FY12 FY13 FY14 FY15 FY16E
0.0%
2.0%
4.0%
6.0%
8.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Billions
34th Annual J.P. Morgan Healthcare Conference | January 11, 2016
REVENUE GROWTH1 (Y/Y)
FY11 FY12 FY13 FY14 FY15 FY16
Mid-Single Digit Range
+6.0%+6.0%+4.0%+4.5%+2.0%+1.0%
02,5005,0007,500
FY11 FY12 FY13 FY14 FY15 FY16E1 Constant currency. Q1 FY11 and Q1 FY16 adjusted for extra week impact. Q4FY15 through Q2 FY16 on a comparable basis.2 Non-GAAP EPS on a constant currency basis. Leverage rounded to the nearest 50bps.3 FCF is operating cash flow minus capital expenditures.
Adjusted for litigation settlements.
Commitment: mid-single digit growth.
Commitment: EPS leverage of 200-400 basis points, constant currency.
Commitment: Return a minimum of 50% to shareholders.
6
400 bps of cc leverage
200bps 700-950bps400bps
400bps100bps
= Returned to shareholders.
-3.5%
CY2015 IN REVIEW: “THE NEW MEDTRONIC”
34th Annual J.P. Morgan Healthcare Conference | January 11, 20167
ACCELERATE Synergy opportunities for
COV’s Peripheral Vascular and Neurovascular divisions
Capital deployment and access to “trapped” cash
Share repo / dividends
Debt paydown
PRESERVE
Employee satisfactionand talent retention
Revenue and EPS growth across groups
OPTIMIZE >$850M cost synergies by FY18
Indirect sourcing
ERP consolidation
Real estate / manufacturing
1 2
3TRANSFORM
Delivering higher value in healthcare
Aligning solutions to emerging value-based payment models
Partnering with new stakeholders to transform the healthcare marketplace
4
Delivering on Commitments Made at Deal Announcement
Preserving and accelerating core strategies: Therapy Innovation, Globalization & Economic Value
Offering a more comprehensive and competitive growth platform
Diversifying revenue mix
Capturing operational synergies
Accretive to FY16 cash EPS and significantly accretive thereafter
Increasing access to capital and optimizing shareholder returns through deployment flexibility
ACQUISITION RATIONALE INTEGRATION PRIORITIES
INTEGRATION UPDATE: PRESERVE AND OPTIMIZE
34th Annual J.P. Morgan Healthcare Conference | January 11, 20168
TALENT, FINANCIAL METRICS, AND PRODUCTIVITY GAINS
Service Model Efficiency / Real Estate
Superior Sourcing
Global ERP Implementation
Centralizing targeted back-office processes in shared service centers
Maximizing real estate productivity
Renegotiating sourcing contracts for freight, logistics and distribution
Direct sourcing and self-insurance
Driving organizational efficiency through a common ERP platform
Medtronic and Covidien cultures continue to come together
Talent retention and employee satisfaction remains strong
Monthly survey encourages open communication
OPTIMIZE
PRESERVE1
2
TALENT RETENTION SUSTAINABILITY
VALUE CAPTURE PROGRAMS TO RESULT IN A MINIMUM OF $850M IN SAVINGS BY FY18
MITG34%
CVG 35%
Diabetes 6%
RTG 25%
FY15: $28.2B
FY14: $17.0B
CVG 52%
Diabetes 10%
RTG 38%
Manufacturing Consolidation
Optimizing manufacturing footprint in FY18+ (not included in >$850M guidance)
GROWTH PRESERVATION
0%
2%
4%
6%
8%
FY14 1H FY15 1H FY16
MDT INC. COV
2
MDT PLC
1 COV 1H FY15 represents Y/Y constant currency growth for calendar 1Q15 and 4Q14.
1
2 Comparable, constant currency. Q1 FY16 adjusted for extra week impact.3 FY15 revenue on a comparable basis.
Y/Y Revenue Growth (CC)
Diversification of MDT Revenue Base
3
34th Annual J.P. Morgan Healthcare Conference | January 11, 20169
COMPLIMENTARY PORTFOLIOS, VALUE-BASED HC LEADERSHIP INTEGRATION UPDATE: ACCELERATE AND TRANSFORM
TRANSFORM
ACCELERATE3
4
USING CATH LAB MANAGED SERVICES AS A ROADMAP FOR OR MANAGED SERVICES
Operating Room Managed Services (ORMS) applies MDT’s cath lab business model to an operating room setting
Utilizes the breadth of MITG products
6 ORMS deals representing ~$140M in cumulative revenue as of Q2 FY16
NEUROVASCULAR Critical element
of rapidly developing MDT Neuroscience strategy within RTG
Leveraging the neurologist call-point
PERIPHERAL VASCULAR
Leading U.S. DCB (IN.PACT Admiral)
Combined salesforce fully integrated and driving above market growth
Enabling broader partnerships
0%
10%
20%
30%
40%
Q4 FY15 Q1 FY16 Q2 FY16
+23%+25%
+32%
Y/Y Medtronic Neurovascular Growth
1 Q1 FY16 adjusted for extra week impact and Y/Y growth in comparable constant currency.
1
Complimentary solutions across the care continuum creating integrated offerings
Deep clinical and healthcare economics expertise
Covidien delivering in-hospital efficiencies
Market-leading distribution footprint
ESTABLISHING MEDTRONIC AS THE VALUE-BASED HEALTHCARE LEADER
CAPITAL ALLOCATION: IMPROVED CASH ACCESSIBILITY
PRE-COVIDIEN1 FY16E – FY18E
Accessible FCF
Trapped FCF
TrappedCash to B/S
M&A
Dividends
ShareRepurchase
~$11BAccessible
FCF
~$5.5BTrapped
FCF
$4BAccessibleB/S Cash
Financial Flexibility
IncrementalShare
Repurchase
Dividends
ShareRepurchase
Debt Paydown
~$9.3BUntrapped
B/S Cash
~$6BTrappedB/S Cash
• Only ~35% of Free Cash Flow Accessible• Issued Debt to Cover Additional Accessible
Cash Needs• Trapped Cash Accumulated• Returned ~50% of Free Cash Flow to
Shareholders
• ~65% of Free Cash Flow Accessible• Untrapping Cash; Already $9.3B in FY16• Return Minimum of ~50% of Free Cash Flow to
Shareholders; Target 40% Dividend Payout Ratio• Target A Credit Profile• Maintaining Healthy Financial Flexibility
Free cash flow (FCF) defined as Operating Cash Flow less Capital ExpendituresOuter rings are sources of cash. Inner rings are uses of cash.1. FY12-FY15, not including impact of Covidien acquisition.
Debt Issuance
10 34th Annual J.P. Morgan Healthcare Conference | January 11, 2016
Potential to accelerate payout ratio faster than previously communicated
DETAILS OF $9.3B CAPITAL DEPLOYMENT
34th Annual J.P. Morgan Healthcare Conference | January 11, 2016
INCREASED FLEXIBILITY IN CAPITAL ALLOCATION
SHARE REPURCHASES1
ADDITIONAL DELEVERAGING2
MAINTAIN FINANCIAL FLEXIBILITY3
Incremental $5 billion by the end of FY18
In addition to MDT’s current commitment to return a minimum of 50% of FCF each year
Opportunistically utilize existing Board authorization
Bias towards repurchasing shares earlier
Repay existing debt or debt coming due
Targeted commitments to debt investors by the end of FY18
Continue to target A-credit rating profile 0.0
3.0
6.0
9.0
12.0
15.0
18.0
FY10-FY12 FY13-FY15 FY16-FY18E
Net Share RepurchasesDividends
~$15B
Commitment: Return A Minimum of 50% of Free Cash Flow to Shareholders
~$7.0B~$6.2B
Incremental $5B Share
Repurchase
$ BillionsSTRONG RECORD OF RETURNING
CASH TO SHAREHOLDERS
Note: Free cash flow (FCF) defined as Operating Cash Flow less Capital Expenditures1 FY12 includes $213M of proceeds related to the sale of Physio-Control used for share repurchases.
1
11
STRONG, CONSISTENT TRACK RECORD OF DIVIDEND GROWTH
15%
20%
25%
30%
35%
40%
45%
$0.00
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
$1.75
$2.00
$2.25
$2.50
$2.75FY
78
FY80
FY82
FY84
FY86
FY88
FY90
FY92
FY94
FY96
FY98
FY00
FY02
FY04
FY06
FY08
FY10
FY12
FY14
FY16
E
FY18
E
FY20
E
Dividend per Share CAGR5-year 11%10-year 15%20-year 17%38-year 18%
Dividend Payout Ratio now ~35%1
Dividend up +25% in FY16E
1 On a non-GAAP basis. Calculated as annual dividend per share divided by prior year non-GAAP earnings per share.
34th Annual J.P. Morgan Healthcare Conference | January 11, 201612
Member of S&P 500 Dividend Aristocrats38 Years of Increasing Dividend per Share
Payout Ratio1
Dividend per Share
Div
iden
d pe
r Sha
re Payout R
atio
TARGETING 40% PAYOUT RATIO
34th Annual J.P. Morgan Healthcare Conference | January 11, 201613
MITGCVG RTG Diabetes
Type 1 Diabetes
Type 2 Diabetes
Heart FailureSCA
CRHF
Comorbidity
Integrated Technology
Clinical / Regulatory Expertise
Sales to Large Entities (Governments / Providers)
Global Manufacturing / Operations / Distribution
Corporate Infrastructure
CLEAR FRAMEWORK FOR EXISTING PORTFOLIOSTRONG CROSS-GROUP SYNERGIES DRIVE STRATEGIC FIT
Hypertension
Arrhythmia
CAD
Strong Cross-Group
Synergies
Is Medtronic Positioned to Win?
What Value Does Medtronic Add?
Line of Sight to Improving Outcomes?
Portfolio Criteria
Coronary and Structural Heart
Aortic & Peripheral Vascular
Early Technologies
Patient Monitoring & Recovery
Brain
Spine
PainAortic & Venous Disease
CAD
RespiratoryDeep Vein
Thrombosis
InfectionNutritional
Insufficiency
StrokeENT
Spinal Deformity
Chronic Pain
Movement Disorders
Trauma
Pre-Diabetes
Integrated Care Solutions
AF
Heart Disease Degenerative Spinal Conditions
Diabetes Service & Solutions
Non-Intensive Diabetes Therapies
Intensive Insulin Management
Lung / Gastrointestinal Cancer
Surgical InnovationsGYN Bariatric
ColorectalThoracic
General Surgery
PAD Renal Care
LEVERAGING STRENGTHS ACROSS GROUPS AND CONTINUUM
34th Annual J.P. Morgan Healthcare Conference | January 11, 201614
DEVELOPING COMPREHENSIVE SOLUTIONS
STROKE THERAPY RENAL CARE SOLUTIONS (RCS)
~3M end stage renal disease (ESRD) patients WW, +2x over the next 10 years
MDT advanced dialysis offers low cost, high quality care using proprietary therapy. 90% less water than traditional single-pass HD
Chengdu government manufacturing and deployment agreement
~17M strokes annually worldwide
$70B annual cost to healthcare systems
MDT positioned as the only full-line supplier of device-based stroke therapy
Comprehensive platform anchored by key market leading product lines and therapies
Treating Root
Cause
Stabilizing Therapy
Identifying Root Cause
Therapy
Future Co-morbidity Applications
AF
Structural Heart
Therapies
SolitaireTM
Medina
Lazarus
PipelineTM Flex
Advanced Dialysis
ESRD Patient
Diabetes CGM/ Pump
Heart Failure
Devices
Carotid Stents
Optimized Management
Reveal LINQ ®
Vascular Access
DCB
SEEQ Patch
TYRX
DES
Reveal LINQ ®
SEEQ Patch
Care Management
Services
Care Management
Services
Stroke Patient
DISCIPLINED PORTFOLIO MANAGEMENT GOVERNS M&A AND STRATEGIC INVESTMENT
34th Annual J.P. Morgan Healthcare Conference | January 11, 201615
Strengthens Strategic Priorities Across Groups
Meets Financial Guidelines
Therapy Innovation
MITGCVG RTG Diabetes
Medtronic has Announced $1.5B of Strategic M&A Since Closing Covidien
Clear financial value propositionMinimal to no “net” EPS dilution
Mid-teens risk-adjusted return hurdle
Globalization
Economic Value
Partnership
Investment
Partnership
2
3
Meets Portfolio Criteria
1
Partnership
Partnership
THERAPY INNOVATION$ CONTRIBUTION
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0FY
11
FY12
FY13
FY14
FY15
1H
FY16
FY20
E
$ Billions
Note: All growth rates and revenue amounts are as reported and include both Covidien and Medtronic.
Brady Wireless (CE)
LINQ (Japan)
RDN
iPro3 (EU)
CONTINUOUS INNOVATION WILL FUEL OUR LONG-TERM SUCCESS
FY17FY16 FY18 Beyond
34th Annual J.P. Morgan Healthcare Conference | January 11, 201617
Micra TPS (CE)
Evera MRI ICD
Resolute Onyx (US)
GastriSail
Visia AF MRI
CoreValve (Japan)
Capnostream35
Cervical Fixation System
Arctic Front
Advance (Japan)
Barrx 360 Express
MRI Safe CRT-D
Evolut R XL
DCB BTK
In-Stent Restenosis
Micra TPS (US / Japan)
CoreValve Evolut R (Japan)
Resolute Onyx (Japan)
Guardian Connect with Enlite 3 (US)
Sapiens
Valiant Evo (EU & US)
TAVRIntermediate
Risk
Pedicle Screw
System
Drug Filled Stent (EU)
Intellis RC
Intrepid TMVR
CardioInsight ecVUE
Pipeline Flex (US)
Robotics Platform
CRT-P Quad (EU)
Note: Timeline is illustrative of general launch timing.
Signia Powered Stapler
MiniMed 670G (US)
Medina Embolization
Endurant Evo (CE)
CoreValve Evolut R
GLOBALIZATION$ CONTRIBUTION
0.0
2.0
4.0
6.0
8.0
FY11
FY12
FY13
FY14
FY15
1H
FY16
FY20
E
$ Billions
~20%
~40%
~10%
~5%
~20%
~5%India
Greater China
Middle East & Africa
Latin America
ASEAN
Central & Eastern EU
TOTAL EMERGING MARKET SALES BY GEOGRAPHY (Q2 FY16) 1
1 Percentages calculated based on reported sales by geography.Note: All growth rates and revenue amounts are as reported and include both Covidien and Medtronic.
Private Partnerships
UNLOCKING THE EMERGING MARKET OPPORTUNITY
34th Annual J.P. Morgan Healthcare Conference | January 11, 201619
The penetration of existing therapies into emerging markets represents the single largest opportunity in MedTech.
STRATEGIC GROWTH DRIVERS
Channel Optimization 21
Traditional Market Development
Broader presence, facilities, more rapid expansion
Capital equipment provides base for therapies
Combined breadth enables broader partnerships
Education & Training Distribution Reach
EMERGING MARKETS PREMIUM: ATTRACTIVE OPPORTUNITY
Existing technology
Out-of-pocket payment or reimbursement established
Comparable margins to developed markets
$5B Annual
Opportunity
COVIDIEN ENHANCES REVENUE GROWTH
Public Partnerships3
GOING BEYOND TRADITIONAL MARKET DEVELOPMENT
34th Annual J.P. Morgan Healthcare Conference | January 11, 201620
CHANNEL OPTIMIZATION
Allows Medtronic to better serve customer needs through more direct relationships
Accelerates growth and captures margin: shared benefit for both the end customer and Medtronic
Strengthens systematic integrity and compliance
BENEFITS APPROACHES
OPPORTUNITY
Today, nearly $3B of MDT sales through over 7,000 distributors
Optimizing distributor relationships will result in an estimated $1.75B over the next 5 years
PARTNERSHIP MODEL CHANGE
DISTRIBUTOR TRANSITIONS
Consolidate and shift Roles and Responsibilities
Adjust distributor margins correspondingly
Distributors focus more on logistics and last-mile services
Q4 FY14: Formed Biostar JV with largest distributor; expanding to additional business units
TURKEY
Q1 FY16: Formed JV with largest distributor (Gulf Medical) for select business units
SAUDI ARABIA
CHINA & INDIA
GOING BEYOND TRADITIONAL MARKET DEVELOPMENT
34th Annual J.P. Morgan Healthcare Conference | January 11, 201621
PUBLIC PARTNERSHIPS PRIVATE PARTNERSHIPS
PUBLIC / PRIVATE PARTNERSHIPS
Abraaj purchases or builds hub hospitals surrounded by networks of clinics Russian government committed to increasing
Acute Coronary Syndrome (ACS) spend by ~4x
Sole supplier arrangement for coronary stents and balloons in Russia for 2017-2022
Estimated 800K-1M ACS patients 2017-2020
MDT majority partner in JV with private company
RUSSIA SOLE SOURCE SUPPLIER ABRAAJ STRATEGIC PARTNERSHIP
CHINA CHENGDU DIABETES & DIALYSISINDIA CLMS PARTNERSHIP
19 partnerships in place; 17 in India, 2 pilot programs in Southeast Asia
Targeted scope to enable infrastructure creation and market development with incremental device revenue opportunity
Focus on building access in Tier 2-3 cities with entrepreneur led and mid-market hospitals (KIMS)
Building pipeline in Southeast Asia and Australia
Long-term government partnership
MDT to locally manufacture dialysis system and next generation sensor augmented pumps
Cardiovascular disease is the leading cause of death in Russia
Commercial commitment and joint market access development
Referral chain and product supply expertise
Focused on Asia, Middle East & Africa, and other developing markets
Committed to improving patient access, healthcare delivery outcomes, and product supply
SERVICES & SOLUTIONS$ CONTRIBUTION
-
250
500
750
FY11
FY12
FY13
FY14
FY15
1H
FY16
FY20
E
$ Millions
Includes Care Management Services (Cardiocom), Cath Lab Managed Services, Operating Room Managed Services and Diabeter
Figures do not reflect related device revenue
Note: All growth rates and revenue amounts are as reported and include both Covidien and Medtronic.
34th Annual J.P. Morgan Healthcare Conference | January 11, 201623
SERVICES & SOLUTIONS: DIVERSIFYING BEYOND DEVICES TO DELIVER ECONOMIC VALUE
MedicalDevicesMedicalDevices
• Linked directly to a specific device or devices
• Helps to realize the full value of the device
Services & SolutionsServices & Solutions
Wrap-AroundPrograms
Wrap-AroundPrograms
Independent Health Solutions
Independent Health Solutions
• Core business• Proprietary
technology
• Not dependent on devices• Broader disease management
programs
Historical BusinessHistorical Business New OfferingsNew Offerings
Examples:ICD, Stent, Spinal Fixation System, Insulin Pump
Primary Customers:Physicians, Patients
Examples:CVG Solutions, Surgical Synergy, Diabetes Services & Solutions
Primary Customers:Hospital Department Administrators, Physicians
Examples:Care Management Services, Cath Lab Managed Services, Operating Room Managed Services, Diabeter
Primary Customers:Hospital Administrators, Payers, Governments
MedtronicIntegrated Health Solutions
Business Model Innovation
REIMBURSEMENT MODELS SHIFTING TO VALUE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201624
FEE FOR SERVICE(e.g. DRGs)
PAY FORPERFORMANCE
INTEGRATED CARE/ BUNDLED PAYMENT
ACCOUNTABLE CARE/SHARED SAVINGS
CAPITATION/GLOBAL PAYMENT
Reimbursed for volume of services, not value
Fee for service at risk for bonuses/penalties based on performance measures
Single payment for all services provided for an episode of care
Capitated payment for some, but not all, services
Capitated payment for all services provided
“ACTIVITY” BASED PROCESS MEASURES
HIGHEST COST PATIENTS
BROADEN PATIENT POPULATION,
INCORPORATING BUNDLED PAYMENTS TO
ADDRESS HIGH COST, HIGH ACUITY PATIENTS
MEDTRONIC LEGACY BUSINESS MODEL
MEDTRONIC VALUE-BASED HEALTHCARE
FOCUS
STEPS TO VALUE-BASED HEALTHCARE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201625
STEPS TO VALUE-BASED HEALTHCARE
SELECT ADISEASE OR CONDITION
DEVELOPPATIENT COHORTS BASED ON RISK AND PROTOCOLS
DEFINEOUTCOME MEASURESTHAT AREMEANINGFULFOR PATIENTS
DEFINETIMEFRAMEREQUIRED TO ACHIEVE OPTIMAL OUTCOME
QUANTIFYBASELINE OUTCOMES AND COSTS FOR EACH PATIENT COHORT
DETERMINEPROSPECTIVE PERFORMANCE AND COST OBJECTIVES –THE VALUE PROPOSITION
DEVELOPBUSINESS MODEL
IDENTIFY PATIENT COHORT
DEFINE AND BASELINE OUTCOMES
DEVELOP BUSINESS MODEL
1 2 3
Medtronic Shaping the Future of Healthcare
Critical to Medtech Innovation
New Partnerships and Business Models Based on Joint Accountability
34th Annual J.P. Morgan Healthcare Conference | January 11, 2016
FOCUSED ON DELIVERING STRONG, CONSISTENT LONG-TERM TOTAL SHAREHOLDER RETURN
MEDTRONIC FINANCIAL FORMULA
Double Digit Total Shareholder Return
26
1 As reported on a constant currency basis.2 Based on closing stock price on January 8, 2016.
Revenue Growth: Strong execution leading to above market performance
Operating Leverage: COV integration resulting in tangible and sustainable operating margin leverage at the high end of our baseline expectation
Capital Deployment: Disciplined capital deployment with a roadmap to increased accessible cash and dividend growth
$
Consistent mid-single digit growth
200-400bps of EPS Leverage
~200bps dividend yield today
1
1
2
NON-GAAP RECONCILIATION TABLES
NON-GAAP RECONCILIATION TABLE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201628
NON-GAAP RECONCILIATION TABLE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201629
NON-GAAP RECONCILIATION TABLE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201630
NON-GAAP RECONCILIATION TABLE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201631
NON-GAAP RECONCILIATION TABLE
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NON-GAAP RECONCILIATION TABLE
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NON-GAAP RECONCILIATION TABLE
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NON-GAAP RECONCILIATION TABLE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201635
NON-GAAP RECONCILIATION TABLE
34th Annual J.P. Morgan Healthcare Conference | January 11, 201636