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1 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
22nd Annual Credit Suisse
Healthcare Conference
November 12, 2013
™
2 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
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.
Safe Harbor For Forward-Looking Statements
3 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
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
www.bostonscientific.com.
Disclaimers
4 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
$2.2
$0.8
$1.9
$0.1
$1.2 $0.5
$0.4
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.
Advancing science for lifeTM
…drives leadership in our served markets
Neuromodulation
Electrophysiology
Urology & Women’s Health
Peripheral Intervention
Endoscopy
Cardiac Rhythm Management
Interventional Cardiology
1 Represents Boston Scientific’s 2012 revenue excluding $122M of revenue from our Neurovascular businesses, which we sold in 2011.
Interventional
Cardiology
Cardiac
Rhythm
Management
Endoscopy
Peripheral
Interventions
Urology &
Women’s
Health
Neuromodulation
Electrophysiology
2012 Revenue: $7.1B1
Cardiovascular
Rhythm
Management
MedSurg
5 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
Large End Markets Expected to Stabilize…
CRV
MedSurg
2012A
Growth
2013E
Growth
2014-2015E
Growth
2016-2017E
Growth
IC (4%) (4%) (2%) (1%)
CRM (5%) (3%) (2%) (1%)
EP 10% 12% 12% 11%
PI 4% 5% 5% 5%
Endo 4% 4% 5% 5%
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%+
…with Growth Accelerating from Adjacencies Source: BSC Internal Estimates
6 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
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
Strategic Imperatives…
Advancing science for lifeTM
…to accelerate growth and enhance profitability
7 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
Rhythm management strategy is focused…
…on providing the EP a comprehensive set of solutions
Comprehensive EP Product Offering
S-ICD®
System
WATCHMAN®
Rhythmia
Mapping System
Next Gen ICD/
CRT-D System
Patient Management
Next Gen Stim /
Ablation Therapies
CE Marked. In the U.S., this is
an investigational device and
not available for use or sale.
U.S. approved and CE Marked.
Device under development.
Not available for use or sale worldwide.
U.S. cleared and CE Marked.
Completed acquisition of Bard
Electrophysiology on November 1.
8 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
Strengthening our Cardiovascular pipeline…
EpicTM Iliac SES U.S. approved and CE Marked.
SynergyTM
CE Marked. In the U.S., this
device is investigational and is
not available for use or sale.
Promus PREMIERTM
CE Marked. In the U.S., this device is not available
for use or sale.
iLab® Polaris Device under development.
Not available for use or sale
worldwide.
CrossBoss® and Stingray® CTO System U.S. cleared and CE marked.
Interventional Cardiology Peripheral Interventions
OffRoad™ CE Marked. In the U.S., this device is
not available for use or sale.
Rubicon™ 18/35 U.S. cleared and CE Marked.
…with meaningful innovation to grow share
9 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
…to expand share and global reach
Differentiated pipeline in MedSurg…
Endobronchial Ultrasound
Endoscopy Urology / Women’s Health Neuromodulation
StarFireTM
Laser
Obtryx®IITM
WallFlex® Transhepatic
Next Generation
Precision SpectraTM
FlexivaTM
TracTip
U.S. cleared and CE Marked.
U.S. cleared and CE Marked.
US approved and CE Marked.
Device under development.
Not available for use or sale worldwide.
Device under development. Not
available for use or sale worldwide.
Device under development.
Not available for use or sale worldwide.
10 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
Hypertension Severe Asthma
Left Atrial Appendage
EP / Atrial Fibrillation2
Deep Brain Stimulation (DBS)
Expanding into new adjacencies…
Transcatheter Aortic Valve
Replacement
…accelerating our growth and leveraging our capabilities * Source: BSC Internal Estimates
• Only device to treat severe asthma
• 88% reduction in ER visits over five years1
• FDA and CE mark approved
• Treats Parkinson’s movement disorders
• 1 million U.S. adults affected by
Parkinson’s disease
• CE Marked; began U.S. pivotal study in
2013
• 3D Image and catheter guidance
• Mapping system designed for faster diagnostics
• U.S. cleared and CE marked
• Permanent closure of left atrial appendage
• Demonstrated stroke risk reduction vs. Warfarin
• CE Marked; projected FDA approval in 1H 2014*
• Over-the-wire balloon with RF electrodes
• Enhanced patient safety and efficacy
• CE marked; projected to begin U.S. IDE
trial in Q1 2014*
• Structural Heart (TAVR)
• REPRISE I complete; REPRISE II
enrollment complete
• CE Marked; projected to begin U.S. IDE
trial in 2014*
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.
11 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
2012A 2017E Total Company
Revenue
Total Company
Revenue
Aligned globally for growth
More balanced global portfolio
Building new capabilities in
Emerging Markets
Brazil, Russia, India and China
(BRIC) growing ~30%
BRIC 4%
International
41%
U.S.
53%
International
43%
BRIC 10%
International
41%
U.S.
50%
International
40%
Driving Global Expansion…
…to Accelerate Growth and Establish New Capabilities Source: BSC Internal Estimates
12 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
…expand operating margins by 600 basis points over time
Operating income improvement initiatives…
• 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
Gross Margin Improvements Operating Expense Improvements
13 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
Estimate through
2017
Adjusted Free Cash
Flow1
$6.5B+
Q4 2012 Cash on
Hand
$0.2B
$6.7B+
Expected Future Capacity for:
Acquisitions:
Growth adjacencies
Near-term revenue contribution
Stock repurchases under $1B program
Risk contingencies
Legal & tax
…Continued Strong Free Cash Flow
Improved Profitability to Drive…
Source: BSC Internal Estimates
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.
14 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
Operational
Revenue*
Adjusted
EPS*
Adjusted
FCF*
2014 – 2015E
• Low-single digit
2013E
• 0.8% - 1.5%
• $0.69 to $0.71 (Includes $0.04 of Med Device tax
impact)
Projected to return to growth in 2013…
…with goal of consistent revenue and adjusted earnings growth Source: BSC Internal Estimates
2016 – 2017E
• Mid-single digit
*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.
• Mid-high single digit
growth
• Strong cash flow
• High-single to low
double digit growth
• Strong cash flow • Strong cash flow
15 22nd Annual Credit Suisse Healthcare Conference – November 12, 2013.
Thank You