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Alex GorskyChairman & Chief Executive Officer
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
Drive Superior Performance
Innovation Execution Customer Focus
— Smart
— Fast
— Agile
— Strategic
— Execute
Platforms / Products over $1B as of YE ’17
Pharmaceuticals Medical Devices Consumer12
Diabetes Spine Electrophysiology
Knees Hips Endocutters
Energy Biosurgicals Vision Surgical(Eye Surgery)
VisionContact Lens
Trauma Sutures
12 3
Drive Superior Performance
Innovation
Financial Performance
Execution
Portfolio ManagementLong-term Sustainability
Customer Satisfaction
Credo Values and Leadership
Our Broad-Base Advantages
Strategic Partner of Choice
Broader Offerings Of Products & Solutions
Achieve Enterprise Efficiencies and Capabilities
Partner with Governments & Public Health Organizations
Create and Access Growth Opportunities
AS OF 12/31/2017
1 YEAR 3 YEAR 5 YEAR 10 YEAR 20 YEAR
Johnson & Johnson 24.4% 13.2% 18.0% 11.0% 10.1%
Competitor Composite* 21.2% 7.9% 14.2% 8.5% 8.1%
S&P 500 21.8% 11.4% 15.8% 8.5% 7.2%
S&P Pharm 12.6% 5.4% 14.1% 9.8% 6.7%
S&P HC Equipment 30.9% 13.9% 18.9% 9.6% 9.8%
Dow Jones Industrial Average 28.1% 14.3% 16.4% 9.3% 8.4%
Data Source: Bloomberg*For the list of companies included in the Competitor Composite, see page 55 of the company’s 2017 Proxy Statement, which can be found at www.investor.jnj.com
Delivering Strong Total Shareholder Returns
Capital Allocation Framework
1 Non-GAAP measure; defined as operating cash flow less capital spending
Investments to Accelerate Growth
Consumer
Medical Devices
Pharmaceutical
LEGEND ONCOLOGY
SURGICAL VISION
Select deals
Capital Allocation Framework
1 Non-GAAP measure; defined as operating cash flow less capital spending
Pharmaceuticals Medical DevicesConsumer
Pharmaceuticals
Consumer
Medical Devices
Drive Superior Performance
Innovation Execution Customer Focus
Drive Superior Performance
Innovation Execution Customer Focus
Near- and Long-termPerformance
Jorge Mesquita
Competing in aChanging World
Executive Vice President, WorldwideChairman, Johnson & Johnson Consumer
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
Proud Tradition of InnovationPurpose, History & ProgressDid you know the Johnson & Johnson Family of Companies created the first…
First commercialFirst Aid Kits
BAND-AID® Brand ofFirst Aid Products: First
commercial dressingsfor small wounds
AVEENO First patented triple
oat formula
First Toothpastein a tube
HELIOPLEX broad spectrum sunscreen
First company to introduce sunscreen
in Brazil
First mass-produced sanitary protection
products for women
Optimizing LED technology for home use with the Light Therapy
Acne Mask
First mild and soap-free
Baby Shampoo
First company to introduce a product
with Retinol
First mass-produced silk Dental Floss in 1890s
Revolutionary skincare technology
NEUTROGENA Hydro Boost
Well Positioned for AboveMarket Growth
Strong plans in place for sustainable above market growth in 2018 and beyond
Solid omnichannel approach enables winning in traditional channels and accelerating success in e-commerce
Iconic scientifically differentiated brands revitalized; innovative relaunches of Baby Care and Oral Care
Continue to improve operating margins whileinvesting for growth
Johnson & Johnson Consumer
6 Broad Categories With >50% of SalesOutside of North America
45%North
America
10%Latin
America
18%Asia
Pacific
27%EMEA
2017 Net Trade Sales
More Than Half of Revenuesin Beauty and OTC
2017 Net Trade Sales
Beauty
Baby Care
Oral Care
OTC
Wound Care
Women’s Health
Wound Care
Oral Care
BeautyOTC
~31%
14%Baby Care8%~6%
~30%
11%
Women’s Health
2017 Market Sizes ($B)
Playing in Large Attractive Categories…
$16Baby Care
$135OTC
$270Beauty
$31Women’s Health
$44Oral Care
$3Wound Care
Our Total Consumer Categories Represent ~$500B Globally
Source: Euromonitor, Nicholas Hall
…That Are Growing Faster Than Consumer Packaged Goods Average
Our categories are growing with a CAGR of ~5% versus CPG2 market growth 3-4%
4%Baby Care
3%OTC
7%Beauty
3%Women’s Health
2%Oral Care
2%Wound Care
5 Year Sales CAGR1
1. Internal Estimates 2017-2022 CAGR based on the addressable market where J&J Competes
2. Consumer Packaged Goods Five Year Sales CAGR
Favorable Consumer Trends
Healthy Beauty OTC Self-Care SolutionsNaturals / OrganicsAging Population
Emerging Middle ClassLifestyle Health IssuesMillennials are Digital / Social Natives
135 Million New Births / Year
Strong Run Between 2014–2016
3.4%CAGR
Grew SalesOrganically1
20%CAGR
Grew Operating Profit2
+450BPS
Improved Adjusted Income Before Tax Margin2
1. Non-GAAP measure, excludes acquisitions and divestitures2. Non-GAAP measure, excludes intangible amortization expense and special items
2017 Sales Slowdown; Delivered Further Margin Expansion
Growth in our categories decelerated
We heldmarket share
Delivered +40 BPS Adjusted IBT growth1
As a result, we delivered flat organic sales and modest operational sales growth
Around the world, customers reduced
inventory
1. Non-GAAP measure, excludes intangible amortization expense and special items
Our Recent Deals are Delivering on Expectations
...The pace of change in our industry is
accelerating...
Our industry is being
disrupted...
The Competitive Advantages on Which the Consumer Industry Have Been Built are Increasingly Less UniqueThey used to be unique… … but now it has never been so easy to…
1 Attract best talent
2 Build and nurture brands Start building a brand online for free; AI powered community
3 Manufacturing assets Find high-quality contract manufacturers
4 Retailer relationshipsSell and deliver directly to consumer
5 Innovation potentialCrowd-source innovation
6 Financial firepowerRaise finance (VCs, crowd-financing)
Source talent on demand
This is lowering barriers for entry and paving the way for a new breed of start-up competitors
At the heart of this digital disruption is a new consumer centric paradigm that is challenging the traditional value of “scale” and forcing an evolution of the retail and media landscape
A new How-to-Win playbook is emerging, characterized by an “asset light” infrastructure, and the creation of highly personalized, on-demand consumer experiences
Ownership of consumer relationship and related ecosystem is the ultimate source of competitive advantage
Digital Disruption is Changing the Face of the Consumer Industry
Unique Strengths of Start-Up Entrants
Move FAST….5
1 Breakthrough innovation by staying close to consumers and trends
2 Build digital-first, purpose-led brands
3 Capitalize on the rise of emerging channels
4 Are hyper-efficient
As a Result, We are Competing in Two Worlds
Large Multi-National Companies Start-Ups
How do we compete in these
two worlds?
We Have a Strong Strategy
12 Mega-Brands In 6 Broad Categories
Where to Play
How to Win
Modern Marketing
Commercial Strategy
Transformational Innovation
P&LProductivity
World Class Organization
Beauty
Baby Care
Oral Care
OTC
Wound Care
Women’s Health
We are Implementing 5 Principles to Guide the Execution of Our Strategy
Broaden the scope of our innovation model1
2 Build our brands to compete in two worlds
3 Win in traditional, legacy channels and new emerging channels
4 Beyond productivity…flexibility and responsiveness
5 Evolve our work processes and culture so we can win in both worlds
Josh Ghaim, PhDGlobal Chief Technology OfficerJohnson & Johnson Consumer
Alison LewisGlobal Chief Marketing OfficerJohnson & Johnson Consumer
Broaden the Scope of Our Innovation Model
Breakthrough Global Platforms Fast Cycle, Locally Relevant Innovation
Superior Product and Packaging Digital Ecosystem
BreakthroughGlobal Platforms
Fast Cycle, Locally Relevant Innovation
Robust Global Innovation PlatformsMore Than 150 New Products in 2018
Breakthrough Global Platforms: LISTERINE is a Proven Global Platform
Broaden the Scope of Our Innovation Model
Driving Category GrowthLeveraging our Global Platform
100 Long-Term Clinical Studies
4 Essential Oils for Unique Formula
100years of safe and effective use in consumer daily lives
5x Less Plaque
2x Less Gum Disease
VS.BRUSHING
Attracting New Users
Increasing #of Swishes
$25B+ Incremental Market Potential1
+
Thymol Eucalyptol Methyl Salicylate Menthol
1. Kantar data, global penetration equal to U.S. penetration
Breakthrough Global Platforms: Accelerating Growth in 2018 Behind a Global Program
Broaden the Scope of Our Innovation Model
Base +1 Benefit Multi-Benefit
Modernize Brand Clarify Line-Up Amplify Support
Broaden the Scope of Our Innovation Model
Addresses a major global consumerneed for gentle gum care
Engaging launch content under BRING OUT THE BOLD global campaign
Fast Cycle, Locally Relevant Innovation: LISTERINE GINGER GUM CARE
Broaden the Scope of Our Innovation ModelBreakthrough Global Platforms: JOHNSON’S Reinvention
Broaden the Scope of Our Innovation ModelBreakthrough Global Platforms: JOHNSON’S Reinvention
Ingredients moms want
Natural & sustainable
Superior experience
Professional endorsement
Unique platform claims & usage
Broaden the Scope of Our Innovation ModelBreakthrough Global Platforms: JOHNSON’S Reinvention = Simplification
Portfolio simplification provides speed and scale
Broaden the Scope of Our Innovation ModelBreakthrough Global Platforms: JOHNSON’S Reinvention
AG
ES
& S
TAG
ES
Breakthrough Global Platforms: JOHNSON’S Reinvention
Broaden the Scope of Our Innovation Model
of its kind innovation
1st
Breakthrough Global Platforms: JOHNSON’S Reinvention
Broaden the Scope of Our Innovation Model
Connected Ecosystem
Broaden the Scope of Our Innovation ModelBreakthrough Global Platforms: JOHNSON’S Reinvention
Shopper Activation
Fast Cycle, Locally Relevant Innovation
Broaden the Scope of Our Innovation Model
Products were designed to appeal to digitally-engaged moms
China E-commerce first launch
Superior Productand Packaging
Digital Ecosystem
Broaden the Scope of Our Innovation Model
1IN3 Cancers diagnosed globally is skin cancer
1Person dies fromMelanoma every 57 Minutes
(in the U.S.)
Superior Product and Packaging: NEUTROGENA Sun
https://www.skincancer.org/skin-cancer-information/skin-cancer-facts
55.3%
39.7%
5.0%
More SunburnedOn SPF 50+ Side
No Difference More SunburnedOn SPF 100+ Side
Bilateral comparison after 1 day skiing, N = 199
125
100
75
50
25
0
Nu
mb
er o
f S
ub
ject
s
Research published in Journal of American Academy of Dermatology
1. https://jamanetwork.com/journals/jamadermatology/fullarticle/2597893
Broaden the Scope of Our Innovation Model
NEUTROGENA is the#1 dermatologistrecommended sunscreen
NEUTROGENA SPF 100 is clinically proven to provide more protection than a beach umbrella1
Our Helioplex goes beyond standard FDA requirementsfor photostability
Superior Product and Packaging: NEUTROGENA Sun
NEUTROGENA Reveals theFirst Dermatologist-Grade At-Home Skin Analysis Tool
Broaden the Scope of Our Innovation ModelDigital Ecosystem: NEUTROGENA
Neutrogena Skin360™ Overview
Moisture Sensing Lines and Wrinkles
Pores
Broaden the Scope of Our Innovation ModelDigital Ecosystem: NEUTROGENA
Build Our Brands to Compete in Two Worlds
Global Campaigns Intensely Local Execution
Superior Science-Based Benefits Purpose Driven
Global Campaigns
Intensely Local Execution
Build Our Brands
Global Insights
Allergies create a persistent wedge between me and other people
The symptoms are an itchy interference to the wonderful “give and take” of truly connecting
Global Campaigns: ZYRTEC Muddle No More
Build Our BrandsIntensely Local Execution: ZYRTEC Weather-Triggered Activation
Science-based Benefits
Purpose Driven
Excellence in Science and Clinical Efficacy Drives Professional Endorsement
Build Our Brands
Scientific Publications1
90%of baby skin publications
300+skin research publications
over
100oral health
publications
Intellectual Property
1,000+patents granted / pending
U.S. only data
Regulatory & Clinical Excellence
Strong Professional Endorsement
Enterprise capabilities enable us to drive new product innovations
classified as medical devices or new drugs by regulatory bodies
#1DentistRecommended
LISTERINE
DermatologistRecommendedNEUTROGENA
AllergistRecommended
ZYRTEC
HospitalRecommendedJOHNSON’S
PediatricianRecommended
MOTRIN
1. http://www.safetyandcarecommitment.com/safety-promise/research
Rapid Release Gels launch drove share growth for adult TYLENOL
Iconic pill and laser-drilled holes delivered functional benefit across touchpoints
Build Our BrandsSuperior Science-Based Benefits:TYLENOL Rapid Release Gels
Build Our Brands
TYLENOL U.S. delivered stories that mirrored diverse family perspectives to celebrate all families
TYLENOL Cold in China taps into insight that sometimes the caregiver of the family gets sick and needscare in return
Purpose Driven: TYLENOL
Build Our Brands
Love + Medicineis better than medicine alone
Jorge Mesquita
Competing in aChanging World
Executive Vice President, WorldwideChairman, Johnson & Johnson Consumer
Win in Existing and New, Emerging Channels
Established Channels
Emerging Channels
Omnichannel Approach
Consumers are shopping everywhere
Win in Existing and New, Emerging Channels
E-commerce
2016 2017 2018 (estimate)** 2019 (estimate)**
6x* in3 years
Net Sales
Win in Existing and New, Emerging Channels
*6X growth anticipated **Estimated J&J Consumer Net Sales into E-commerce Channel
Win in Existing and New, Emerging ChannelsE-commerce
How to Win-Focus on Fundamentals
SCANR
Search
Rating & Reviews
Navigation
Available Assortment at the Right Place
Content
Win in Existing and New, Emerging ChannelsEmerging Channels: E-commerceAVEENO Baby is the #1 Selling Baby Brand on China’s Leading E-commerce Channels
Beyond Productivity – Flexibility and Responsiveness
Drive Efficiency
Create Flexibility & Responsiveness
Beyond Productivity – Flexibility and Responsiveness
Achieved more than $1.7B in
productivity over past 4 years
Efficiency isn’t enough. The world
is changing.
$13.6B2017Revenue
20.3%2017 Profitability1
With a Solid Strategy, Consumer is a Significant Contributor to J&J
1. Non-GAAP measure, excludes acquisitions and divestitures
We’re Confident We Will Winin This Marketplace
Strong plans in place for sustainable above market growth in 2018 and beyond
Solid omnichannel approach enables winning in traditional channels and accelerating success in e-commerce
Iconic scientifically-differentiated brands revitalized; innovative relaunches of Baby Care and Oral Care
Continue to improve operating margins whileinvesting for growth
Appendix
Oral Care
Strategic Initiatives
• Increase market penetration: Deliver category, share & usage growth
• Emerging Markets Expansion: Drive accelerated growth through locally relevant solutions
• Category Innovation: Disrupt the category with breakthrough innovation
2017 SALES CHANGE1
2017 WW MARKET POSITION2
WW Market2017-2022 CAGR3
TOTAL WW MARKETREVENUE 20223
(3.2%) #1 ~2% ~$5B
1 Operational
2 Based on Euromonitor 2017
3 Internal Estimates
Note: Market data refers only to the addressable market where J&J competes
Baby Care
Strategic Initiatives
• Re-launch JOHNSON’s Baby with excellence
• Continue steady growth on AVEENO Baby
• Rapidly expand Ecommerce and scaling Perfect Store
• Broaden the scope of our innovation model
2017 SALES CHANGE1
2017 WW MARKET POSITION2
WW Market2017-2022 CAGR3
TOTAL WW MARKETREVENUE 20223
(4.7%) #1 ~4% ~$7B
1 Operational
2 Based on Euromonitor 2017
3 Internal Estimates
Note: Market data refers only to the addressable market where J&J competes
Beauty
Strategic Initiatives
• NEUTROGENA: Strengthen leadership with disruptive innovation including high tech beauty and first-to-market beauty trends
• AVEENO: Capitalize on AVEENO’s unique health and wellness position driving new naturals in premium mass. Expand globally
• OGx: Accelerate and expand growth into new segments
• Dr. Ci Labo: Continue growth by driving premium and scaling the D2C Ecommerce channel
2017 SALES CHANGE1
2017 WW MARKET POSITION2
WW Market2017-2022 CAGR3
TOTAL WW MARKETREVENUE 20223
7.2% #5 ~7% ~$90B
1 Operational
2 Based on Euromonitor 2017
3 Internal Estimates
Note: Market data refers only to the addressable market where J&J competes
OTC
Strategic Initiatives
• Grow base business via new claims & purpose driven and science-backed campaigns on Pain, Smoking Cessation, Cough & Cold & Allergy
• Advance Next Generation Treatments by entering devices and non-medicated solutions such as TYLENOL Light + Heat Therapy in the US and MOTRIN Baby Patch in China
• Advance geographic expansion of need states such as Smoking Cessation in China, Pain in Russia & Asia Pacific, and Cough in Asia Pacific
2017 SALES CHANGE1
2017 WW MARKET POSITION2
WW Market2017-2022 CAGR3
TOTAL WW MARKETREVENUE 20223
2.6% #4 ~3% ~$36B
1 Operational
2 Based on Nicolas Hall 2017
3 Internal Estimates
Note: Market data refers only to the addressable market where J&J competes
Women’s Health
Strategic Initiatives
• Establish Carefree as a grooming brand: strengthen liners leadership, while redefining Intimate Care for expansion
• From menstrual lead to Intimate Health & Wellness: lead in top 5 countries, simplify portfolio and address women at all lifestages
• Accelerate through partnerships: invest externally to speed up future pipeline
• Attract and lock-in younger generations: strong focus on recruiting, educating, engaging and retaining young consumers
2017 SALES CHANGE1
2017 WW MARKET POSITION2
WW Market2017-2022 CAGR3
TOTAL WW MARKETREVENUE 20223
(3.7%) #4 ~3% ~$7B
1 Operational
2 Based on Euromonitor 2017
3 Internal Estimates
Note: Market data refers only to the addressable market where J&J competes
Sandra Peterson
Competing in a Changing Environment
Executive Vice President, Group Worldwide ChairJohnson & Johnson
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
Facing Many Similar Challenges
Consumer and Medical Devices Share Opportunity to Improve People’s Lives
Nontraditional Competitors and New Influencers
Markets Disrupted by Technology
Changing Consumer and Patient Expectations and Behaviors
Customers’ and Industry Consolidation(~7K Retail Closings, U.S. Hospital Mergers & Acquisitions Increased 13% in 20171)
Shifting Customer Dynamics, Increased Need for Efficiency and Value
Global Cost Pressures
Transformative Innovation and Disciplined Portfolio Optimization
Consumer Experience/Business Model Evolution
Leveraging Science, Technology, Scale & Expertise
Consistent Excellence in Execution
Responding with Robust Strategies to Restore Sustainable, Above-Market Growth
1. Kaufman Hall & Associates: 2017 Year in Review: This Year M&A Shook the Healthcare Landscape, 2018
Powerful Forces Reshaping Medical Devices
Information UbiquityEmpowered consumers are
demanding personalized, friction-free experiences
Changing care deliveryNew types of care and sites of care
Growing at an unprecedented pace
Increasing pressure from customers for increased
efficiency and new sources of value
Global shortageof physicians and
healthcare workers
Technology Explosion
Science, Technology and Big Data
Middle Class Expansion
in Emerging Markets
Aging, Urbanized
Populations
Crisis of Access
Unsustainable Cost Trajectory
Driving increased prevalence of chronic and lifestyle driven conditions
Technology Explosion
Science, Technology and Big Data
Aging, Urbanized
Populations
Challenge of Access
Cost Trajectory
Middle Class Expansion
in Emerging Markets
Johnson & Johnson Medical Devices
Global market leader in general surgery, orthopaedicsand contact lenses
#1
Platformswith12 >$1B in sales
2017 sales~$27B
of salesgeneratedOUS~50%
of sales inemergingmarkets~20%
of sales from#1 or #2 global market shareposition80%
Benchmark levelsof profitability
Sources include internal data and public filings
Medical Devices Market Growing ~4%
$86 $97 $122 $-
$100
$200
$300
$400
$500
$600
2014 2017 2022J&J Markets Rest of Medical Device
~$370~$400
~$490
WW Medical Device Market Size ($U.S. Billions)1 Key Drivers of Growth
Rise of aging population1
Population over 60 will be more than double by 2050 (962M in 2017, 2.1B in 2050)2
Growth of people entering middle class
2 5 people enter middle class every second3
Urbanization3 2.5B more people projected to live in urban centers by 20504
Increasing access to care in emerging markets
4 Emerging market healthcare spend 2017-2022: ~7% CAGR5
J&J Medical Devices Markets Growing at ~5%
1. Source: HRI & J&J internal estimates2. United Nations, World Population Prospects: the 2017 Revision3. Brookings Institute, Future Development, July 20174. United Nations Department of Economic and Social Affairs, 20145. BMI, 2018
We Have a Legacy of Addressing Unmet Needs and Creating New Markets Through Innovation
Femtosecond Laser
1st femtosecond laser for LASIK in the U.S., ushering in modern era of refractive eye surgery
1987ACUVUE
The worlds’ first mass-market disposable contact lens
1995CARTO System
Real-time 3D electroanatomical mapping system for cardiac ablation
2013ATTUNE Primary Knee System
Pathbreaking technology, design, kinematics, engineering and materials to deliver stability and motion
2001SUMMIT Hip System
A comprehensive set of implants to treat a wide range of patients with differing needs
CORAIL Hip System
The world’s most widely used cementless femoral system enabling bone conversation
1985
2000
2017
A holistic approach to help healthcare systems realize better care and reduced costs
Standardized and digitized procedure of surgical workflows to reduce variability
Minimally Invasive Surgery
First MIS gall bladder surgery paves the way for laparoscopic solutions
1988
Multifocal IOL
First multifocal IOL, allowing patients to
recover from cataract surgery with less
dependence on glasses
1998
THERMOCOOL SMARTTOUCH Catheter
A therapeutic catheter to enable the direct and real-time measurement of contact force during catheter ablation procedures for AFib
2011
TFN-ADVANCED
Advance in hip fracture treatment, including outcome-based design, reduced procedural complexity and comprehensive surgical options
2015
PINNACLE Hip Solutions
Versatile acetabular cup system which replaces the natural hip socket and has since been provided for more than 2.5 million patients
1984PFC Total Knee Replacement System
Improved range of motion and implant stability by retaining the primary cruciate ligament
Foldable IOL
First small-incision foldable IOL, changing how cataract procedures are done
1989
1887Sterile Sutures and Dressings
Ushered in modern antiseptic surgery
Surgical Bleeding SURGICEL
Major advance in surgical bleeding control
1960
While recent performance has been mixed, we are refreshing our growth strategy, reshaping our portfolio and improving execution.
9
Robust, Holistic Innovation and Portfolio Shaping Strategy
• Exiting slower growth categories– Cordis, OCD, Codman Neurosurgery, Diabetes
• 30+ transactions in 2017; 12+ in 2018 YTD
• $5B Invested in 2017; ~$500MM in 2018 YTD– Surgical Vision, Neurovascular, Robotics,
Surgical and Ortho tuck-ins
• $8B Invested in R&D over the past 5 Years
• 15-20 major product launches planned in 2018
Strengthening Our Foundation to Improve Performance and Accelerate Growth
Disciplined PortfolioManagement
Accelerated Deal Pace
Doubled New Product Launches in 2017
Relentlessly Focused on Execution
• Completed quality remediation andSynthes integration
• Transformation announced YE 2015 is on track to deliver commitment of $800MM-1B in savings and operational improvements
• Next phase of supply chain optimization is increasing flexibility, improving GP andcustomer responsiveness
• Evolving go-to-market models and channels in response to customer needs: Managed Services,CareAdvantage, ASCs, MyACUVUE.com
• Increasing investment in sales force coverage and training
Strengthening Our Foundation to Improve Performance and Accelerate Growth
Improving Quality
Simplifying Operations
Innovating Business Models
Strengthening Our Foundation to Improve Performance and Accelerate GrowthUniquely Leveraging Science, Technology, Scale and Expertise
Providing Value Beyond the Product or Traditional Point of Care
Reimagining Professional Education
• Actively co-creating with health systems to improve outcomes, increase patient satisfaction and reduce costs
• Introducing digitally enabled services and tools to optimize surgeries and OR efficiency with standardized procedures, strengthen surgeons’ skills to help patients better prepare for surgery and recovery
• Regaining leadership in professional education with the global launch of the Johnson & Johnson Institute and differentiating technology with proven links to outcomes. 26 locations around the world, C-SATS acquisition
Expect to Return to Sustainable Above Market Growth in 2020
Relentlessly Focused on Execution
Improving Quality
Simplifying Operations
Innovating Business Models
Uniquely Leveraging Science, Technology, Scale and Expertise
Providing ValueBeyond the Product or
Traditional Point of Care
Reimagining Professional
Education
Robust, Holistic Innovation and Portfolio Shaping Strategy
AcceleratedDeal Pace
Doubled New Product
Launches in 2017
Disciplined Portfolio
Management
Strengthening Our Foundation to Improve Performance and Accelerate Growth
• Exiting slower growth categories
– Cordis, OCD, Codman Neurosurgery, Diabetes
• 30+ transactions in 2017; 12+ in 2018 YTD
• $5B Invested in 2017; ~$500MM in 2018 YTD
– Surgical Vision, Neurovascular, Robotics, Surgical and Ortho tuck-ins
• $8B Invested in R&D over the past 5 Years
• 15-20 major product launches planned in 2018
• Completed quality remediation andSynthes integration
• Transformation announced YE 2015 is on track to deliver commitment of $800MM-1B in savings and operational improvements
• Next phase of supply chain optimization is increasing flexibility, improving GP and customer responsiveness
• Evolving go-to-market models and channels in response to customer needs: Managed Services,CareAdvantage, ASCs, MyACUVUE.com
• Increasing investment in sales force coverage, training and compensation
• Actively co-creating with health systems to improve outcomes, increase patient satisfaction and reduce costs
• Introducing digitally-enabled services and tools to optimize surgeries and OR efficiency with standardized procedures, strengthen surgeons’ skills to help patients better prepare for surgery and recovery
• Regaining leadership in professional education with the global launch of the Johnson & Johnson Institute and differentiating technology with proven links to outcomes. 26 locations around the world, C-SATS acquisition
Johnson & Johnson is Focused on Attractiveand Growing Markets
Orthopaedics
2017 Market Size
~$45B
2017-2022 CAGR
+3%
Surgery
2017 Market Size
~$23B
2017-2022 CAGR
+6%
Interventional Solutions
2017 Market Size
~$6B
2017-2022 CAGR
+11%
Eye Health
2017 Market Size
~$18B
2017-2022CAGR
+5%
...And Investing in Categories Slated for Solid Double-Digit Growth
Surgical Robotics
Oncology & Ablation NeurovascularOrthopaedic
Robotics
Source: Internal estimates
Building on Areas of Strength and Addressing Performance that Needs Improvement
Building from Strength Focusing on Improvement
Orthopaedics
Interventional
Surgery
Eye Health
Orthopaedics
Surgery
Energy #2
#1ElectrophysiologyContact Lens #1
EndomechanicalSports #3 #1
BiosurgeryHips #2 #3Knees#1
Wound ClosureTrauma #1 Spine #2#1
Surgical Vision #2
Beginning to Win with Customers in a Changing Landscape
J&J uniquely positioned to address diverse customer needs and pain points by bringing full range
of capabilities through innovation and services.
Products Clinical
Industry consolidation
Globalization
Physicians increasingly employed by health systems
Increasing burden of administrative cost andlow margins
Solutions
Winning Through Customer-Specific Commercial Models
50+ Wins To Date In 2018
Reimagining Professional Education to Increase Access, Improve Outcomes and Reduce Costs
Digitally Enabled, Holistic and Linked to Outcomes
Training
Classroom Based
EventDriven
HCP Focused
Always Available
FROM TO
Coaching
Omni-ChannelEducational
ecosystem in action
Training Dashboard
Coaching
Hands-On Training
Patient Outcomes
Deliberate Practice
Intra-op Performance
With a Refreshed Strategy, Competing in Segments ofHigh Growth and Unmet Need, We are Committed to Transforming Healthcare
Applying Disciplined Execution and Groundbreaking Innovation to Return to Above Market Growth
Developing Connected Products and Solutions Across
the Entire Patient Journey
Leveraging Data and Insights to Lower Costs, Increase Access
and Improve Outcomes
Innovating at the Forefront of Science AND Technology
Expect to Achieve AboveMarket Growth in 2020
Accelerating growth sequentially in 2018
Building on strengths and addressing areas that need improvement
Increasing innovation cadence
Optimizing portfolio targeting high growth areas and unmet needs
Executing with excellence
Johnson & Johnson Medical Device Leadership
Euan Thomson, PhDGlobal Head, R&D
Johnson & Johnson Medical Devices Companies
Xiao-Yu Song,MD, PhD
Worldwide R&D LeaderJohnson & Johnson Vision
Peter Shen, PhDGlobal Head, R&D
Johnson & Johnson Medical Devices Companies
Ashley McEvoyCompany Group Chairman,Johnson & Johnson Vision
Michael del PradoCompany Group
Chairman Ethicon
Shlomi NachmanCompany Group Chairman,
Interventional Solutions & Specialty Surgery
Ciro RömerCompany Group Chairman,
DePuy Synthes; Johnson & Johnson Medical Devices, North America
Shlomi Nachman
Changing the Trajectory of Atrial Fibrillation and Stroke
Company Group Chairman, Interventional Solutions & Specialty Surgery
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
Interventional Solutions:A Significant Growth Portfolio
Interventional Solutions is a $2.3B portfolio, delivered 12% ops growth*in 2017
WW EP market at $4.4B with strong growth: 11% CAGR (2017-2022)
WW Neurovascular Market at ~$2B is vibrant: ~10% CAGR (2017-2022)
Biosense Webster is the market leader in all regions with >$2B in sales and ~46% share WW
CERENOVUS is our new stroke intervention business with ~$200M revenue in 2017 and ~11% share
Source: Internal estimates* Excludes impact of translational currency
AFib is a Growing Global Health Concern Affecting Millions of Lives and Burdening Healthcare Systems
33 MillionEstimated number of individuals
with AFib globally1
5,000,000
>50% of AFib patients do not respond to or cannot tolerate drug therapy4
5XRisk of stroke is fivefold in
patients with AFib2
$16 BillionAnnual estimated cost to Medicare, with
inpatient expenses contributing the majority3
<10%Drug-resistant paroxysmal AFib remains significantly undertreated with less than
10% undergoing ablation5
The annual new cases of AFib globally in 20101
50%
4. Calkins et al. Arrhythmia and Electrophysiology. 2009; 2:349-361 5. Chugh et al. Circulation 2014;129:837-847
1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4151302/2. https://www.cdc.gov/dhdsp/data_statistics/fact_sheets/fs_atrial_fibrillation.htm3. Health Services Utilization and Medical Costs Among Medicare Atrial Fibrillation Patients / September 2010
Unmet Needs Shape Our Innovation Strategy Designed to Improve Efficiency and Simplicity
Locate Where to Ablate
Advanced Mapping and Persistent AF Solution
Deliver Better Lesion Treatments
Contact Force Sensing and Lesion Assessment
Simplify the Procedure
Multi-Electrode Ablation and Single Shot Device
High Density Mapping Catheters
Signal Processing
High Power Short Duration Ablation
Radiofrequency Balloon Catheter
Workflow Optimization
These products are under development, are not approved or cleared by FDA and are not available for sale or commercial use in any market
Focusing on Critical Areas to Fuel Our Strong Growth Momentum
AFib Adjacencies
• Left Atrial Appendage Device – WAVECREST
– Commercially available in EMEA
Indication Expansion
• Persistent AF Indication (PRECEPT Study)
• CABANA study – Ablation as first-line therapy
• Evidence generation – continued investment in clinical studies
Commercial Expansion
• Differentiated commercial field model deployed around the world with Clinical Account Specialists supporting cases
• Worldwide acceleration in commercial and clinical hiring
Stroke is One of the Most Feared and Devastating Diseases
1 in 6 People worldwide will have a
stroke in their lifetime1
$320 BillionEstimated economic costs of heart disease and stroke, after taking into account health
expenses and lost productivity2
6 SecondsWorldwide, a stroke claims
a life every 6 seconds1
Stroke remains the second leading cause of death in the world and a
leading cause of long-term disability1
1. http://www.strokecenter.org/patients/about-stroke/stroke-statistics/2. https://www.cardiosmart.org/News-and-Events/2015/01/New-Report-Conveys-Global-Impact-of-Heart-Disease-and-Stroke
A Stroke Is a “Brain Attack” and it Can Happen to Anyone, at Any Time, at Any Age
Ischemic Stroke
Hemorrhagic Stroke
Prevalence Causes Treatment Market/CAGR (‘17-‘22)
90%of stroke cases
(4,557,629 cases worldwide in 2017)1
10%of stroke cases(471,291 cases
worldwide in 2017)1
Obstruction within a blood vessel
supplying blood to the brain
(caused by clot)
Weakened vessel ruptures and
bleeds into the surrounding brain; Blood accumulates and compresses the surrounding
brain tissue
Acute Treatment
(Thrombectomy Devices)
Preventative Treatment
(stents, coils, etc.)
~$700MM~15%
~$1.3B6%
2
2
1. GlobalData 2018 Neurovascular Thrombectomy and Embolization Market Model2. Internal estimates
Every Second Matters in Stroke Treatment and Our Innovation Strategy is Shaped by Unmet Needs
Key Unmet Need
1. Improve aneurysm neck coverage to improve aneurysm occlusion
2. Reduce or eliminate the need for dual anti-platelet regimens
HemorrhagicIschemic
Key Unmet Need
1. Time is brain – extract clot quickly and safely
2. Distal emboli protection
PulseRider Humanitarian Device (USA ONLY). Authorized by Federal law for use with embolic coils for the treatment of unruptured wide-necked intracranial aneurysms originating on or near a vessel bifurcation of the basilar tip or carotid terminus with inflow vessel diameters from 2.7 mm to 4.5 mm. The effectiveness of this device for this use has not been demonstrated.
Focusing on Critical Areas to Position Ourselves for Rapid Growth
Commercial Expansion
• Implementing differentiated commercial model including clinical expertise around the world
Evidence Generation
• Generating robust evidence to support product adoption and market expansion
– Registration studies
– Reimbursement studies
– Registries
Entering New Segments
• Ischemic Stroke Market
– Continue EmboTrap commercialization in EMEA
– Expect to enter U.S. market in June
• Flow Diverter Market
Our Sense of Urgency to Change the Trajectory of AFib and Stroke is Stronger Than Ever Before
We are confident we will continue delivering strong double-digit growth
Millions of patients waiting
13
Appendix
Electrophysiology
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
16.6% #1 ~11% ~$7.4B
Strategic Initiatives
• Continue CARTO 3 System penetration around the world with innovative software enhancements including VISITAG, CONFIDENSE and Multi-Electrode Mapping Modules
• Launch next generation ablation solutions to address efficiency, efficacy and ease of use needs for AF and VT
• Expand AF leadership beyond Paroxysmal AF to include persistent AF indication in the U.S.
• Advance AF Care continuum solutions and capitalize on AF adjacent categories (Left Atrial Appendage Device Coherex acquisition)
1 Operational2 Internal estimates
14
Aesthetics
Strategic Initiatives
• Heavy customer engagement fueling R&D pipeline with recent launch of ARTOURA Smooth Breast Tissue Expander driving clear leadership in Expander Category
• Leveraging consumer preference and implant softness to drive customer loyalty with new MemoryGel Xtra Breast Implants
• Strategic external partnerships meeting a wide range of customer needs (Dermis, Suture, Facial Injectable Program)
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
(8.7)% #2 ~4% ~$1.5B
ARTOURASmooth Breast Tissue
Expander
1 Operational2 Internal estimates
15
Neurovascular
Strategic Initiatives
• Divested Codman Neurosurgery business and are focused on the neurovascular / stroke market; re-branded the organization as Cerenovus
• Accelerate growth in Neurovascular through acquisitions of Pulsar Vascular, Inc. and Neuravi Limited
• New market entry into Ischemic stroke (87% of all stroke cases) with EmboTrap Revascularization Platform in the U.S this year
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
(1.0)% #4 ~10% ~$3.2B
1 Operational2 Internal estimates, excludes Neuro Modulation 16
Ear, Nose, and Throat (ENT)
Strategic Initiatives
• Continue Leadership in Balloon Sinuplasty by focusing on cadence of innovation and new product introduction
• Expand Acclarent presence in broader ENT market through entry into:
– Eustachian Tube Dysfunction (ETD) market: Strong momentum in adoption of Acclarent AERA technology with more than 1,500 surgeons trained and 10,000 patients treated in 2017
– Navigation market: Entry into navigation category with differentiated platform leveraging Biosense Webster navigation expertise
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
(1.5)% #2 ~4% ~$1.1B
1 Operational2 Internal estimates
17
Infection Prevention
Strategic Initiatives
• Sustain strong Terminal Sterilization market leadership with solid innovation cadence across ASP portfolio
• 2017 launch of next generation STERRAD Sterilization System with ALL CLEAR technology, and rapid 30min Biological Indicator form a compelling ecosystem, fueling momentum and growth in business for 2018 and beyond
• Expecting continued cadence of innovation in high level disinfection (HLD) category with launch of AEROFLEX in U.S later this year
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
(3.2)% #1 ~4% ~$5.5B
1 Operational2 Internal estimates
18
Ciro Römer
Building Our OrthopaedicsBusiness for the Future
Company Group Chairman, DePuy SynthesJohnson & Johnson Medical Devices, North America
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
110MM 250MMPeople suffer from symptomatic hip and knee osteoarthritis1
People suffer from osteoporosis worldwide2
Hip replacements occur worldwide every year3
Knee replacements are performed annually4
Of certain spine surgeries are successful using the technologies available today5
1.6MM
Only 40%
2.2MM
Operatively treated fractures occur per year globally6
6.4MM
Movement: A Fundamental Aspect of Life
1: Global Burden of Disease Study 2010 2: Statistics gathered from the WHO and International Osteoporosis Foundation3: ©2018 GlobalData – 39 Country Hip Reconstruction Market Forecast Model Dataset4: ©2018 GlobalData – 39 Country Knee Reconstruction Market Forecast Model Dataset5: Thomson S. Failed back surgery syndrome – definition, epidemiology and demographics. Br J Pain. 2013; 7 (1):56–596: Internal estimates
Hips: #2Market ~$6.5B
1.0%-1.5% CAGR ‘17-22
Knees: #3Market ~$8.0B
2.0%-2.5% CAGR ‘17-22
Spine: #2Market ~$9.5B
1.0%-1.5% CAGR ‘17-22
Sports & Shoulders: #3Market ~$7.5B
4.5%-5.0% CAGR ‘17-22
~3.0% CAGR ‘17-22
Positioned broadly across
orthopaedics
#1 in a $45B global market
#1 or #2 in 3 out of 5 platforms
World’s Largest and Most Comprehensive Orthopaedics Business
Source: Internal estimates
Trauma: #1Market ~$7.5B
3.5%-4.0% CAGR ‘17-22
Hips: #2
Spine: #2
Sports: #3
Performance Has Been Mixed
Building from Strength Focusing on Improvement
Industry differentiated portfolio and pipeline expected to lead to above market growth in
these platforms in 2018 and beyond.
Completing portfolio and addressing Spine’s sales force attrition anticipated to stabilize
performance in 2018 and contribute to above market growth in 2020 and beyond.
Trauma: #1Knees: #3
Key Accomplishments in the Past 24 Months Position Us for Growth
Reinvested in innovation and createdproduct launch momentum
Increased presence in digitally enabled solutions
Completed critical quality andregulatory inspections
Stabilized commercial organizationand evolved go-to-market modelacross the world
Closed critical portfolio gaps through external innovation
Strengthen core portfolio to address surgeons and patients unmet needs
Address cost to serve to support the sustainability of the healthcare system
Drive better clinical outcomesfor increased patient satisfaction through digital solutions
PERSONALIZATION, AUTOMATIONAND CONTINUUM OF CARE
Building Our OrthopaedicsBusiness for the Future
ATTUNE Knee Implant Survivorship Consistent with TKA Class Based on Four Independent Registries
UK Australia
New Zealand Michigan
ATTUNE Patient-Reported Outcomes Improved Compared to Other Leading Knees
One year results from two worldwide studies showed improved patient reported outcomes with the ATTUNE Knee compared to other leading knee systems examined in those studies1
Confidence in knee performance1
Patellofemoraloutcomes2-5
Activities of daily living1 Quality of life1
1. Hamilton W.G., Brenkel, I., Clatworthy, M., Dwyer, K., Himden, S., Lesko, J., Kantor, S.: Early Outcomes with a New Primary TKA System vs. Contemporary TKA: Interim Results of Two Worldwide, Multi-Center Prospective Studies. AAOS San Diego, California, March14-18, 2017. Poster #106. Other implants tested: SIGMA Knee (DePuy), NexGen® (Zimmer), Triathlon® (Stryker)
2. Toomey SD, Daccach JA, Shah JC, Himden SE, Lesko JP, Hamilton WG. Comparative Incidence of Patellofemoral Complications Between 2 Total Knee Arthroplasty Systems in a Multi-Center, Prospective Clinical Study. J Arthroplasty 2017;32(9S); S187-S1923. Indelli PF, Pipino G, Johnson P, Graceffa A Marcucci M, Posterior-stabilized total knee arthroplasty: a matched pair analysis of a classic and its evolutional design. Arthroplaasty Today 2016;2:193-84. Martin JR, Jennings JM, Watters TS, Levy DL, McNabb DC, Dennis DA, Femoral Implant Design Modification Decreases the Incidence of Patellar Crepitus in Total Knee Arthroplasty. J Arthroplasty 2017; 32(4): 1310-13135. Ranawat CS, White PB, West S, Ranawat AS. Clinical and Radiograph Results of Attune and PFC Sigma Knee Designs at 2-Year Follow-up: A Prospective Matched-Pair Analysis. J Arthroplasty 2017; 32(2): 431-436
Comprehensive knee system developed to provide better range of motion and prevent the unstable feeling some patients experience during everyday activities
Knee: Improving Outcomes and Patient Satisfaction, While Addressing Cost to Serve
~600,000Implants Worldwide
ComprehensiveEvidence Generation
Program
43Countries
Knee: Improving Outcomes and Patient Satisfaction, While Addressing Cost to Serve
ATTUNE PrimaryThe original knee system
developed as part of the largest research effort in the history of
DePuy Synthes
ATTUNE Revision KneeAddresses broad range of complex primary and
revision procedures
ATTUNE CementlessEnables biologic fixation
of the implant to the bone for enhanced fixation
Knee: Improving Outcomes and Patient Satisfaction, While Addressing Cost to Serve
Spine: Turnaround Focused on Faster-Growing Segments and Multiple Product Launches
Large and attractive global market with high unmet needs
60%of the population experiences low
back pain1
Only 40%of certain spine surgeries
are successful using the technologies on
the market today3
2%of the population is
disabled because of back pain2
1. Thomson S. Failed Back Surgery Syndrome – Definition, Epidemiology and Demographics. Br J Pain. 2013; 7(1):56–592. World Health Organization, Priority Medicines for Europe and the World Update Report, 2013. http://www.who.int/medicines/areas/priority_medicines/Ch6_24LBP.pdf3. Friedly, J, et al. Epidemiology of Spine Care: The Back Pain Dilemma. Phys Med Rehabil Clin N Am. 2010 Nov; 21(4): 659–677. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3404131/
Spine: Turnaround Focused on Faster-Growing Segments and Multiple Product Launches
Our focus is on faster-growing segments with the most potential of helping surgeons and patients
Deformity
Aging Spine
Complex Cervical
Minimally Invasive Surgery
Spine: Turnaround Focused on Faster-Growing Segments and Multiple Product Launches
Disruptive technologies to return to above market growth
VIPER PRIME System for Minimally
Invasive spinal fusion surgery
UNLEASH MIS TLIF Solution featuring CONCORDE LIFT Expandable Cage
PROTI 360 Family of Titanium-
Integrated PEEK Implants
Sentio Nerve Monitoring Technology for Minimally Invasive
Surgery
Hips: Complete Anterior Approach Solution Driving Growth
~$7BGlobal Market Size
5 YEARS#2Global Market Position Above Global
Market Growth
Well positioned to win
Source: Internal estimates
Patients desire earlier return to function after surgery1
Hips: Complete Anterior Approach Solution Driving Growth
Anterior Approach
Instruments
hana table2
Implants
ACTIS Total Hip System
SERFDual Mobility
System
ME Impactor
Our Complete Solution
Joint Point
Automation Digital Solution Instruments & Enablers
1. Dr. William G. Hamilton, Anderson Orthopaedic Clinic, The rise of outpatient THA combined with changing patient expectations have put a demand on THA prostheses to promote a quick return to activities of daily living 2. Anderson Dr. Matta receives royalties as the designer of the hana table which is manufactured by Mizuho OSI
~$8 BillionGlobal Market
Sports & Shoulders: Gaining Momentum in Fast Growing Orthopaedics Segments
Growth Rate Sports & Shoulders market
>1.5 pts higher than the overall orthopaedics market
Source: Internal estimates
2
7
8
9
10
11
4
5
6
1
3
Sports & Shoulders: Gaining Momentum in Fast Growing Orthopaedics Segments
Innovation in shoulder reconstruction with the GLOBAL ICON Stemless Shoulder in Europe and Canada, the GLOBAL UNITE Reverse Fracture System and TRUMATCH Personalized Solution
Shoulder soft tissue repair:Launch of DYNACORD to address the unmet need for rotator cuff repair sutures that have high fixation strength, minimize any gap between the bone and tendon, and minimize suture slippage or laxity
#1 MONOVISC & ORTHOVISC in the hyaluronic acid market2
ACL reconstruction and meniscus repair platform that drove faster-than-market growth
Refreshing our capital equipment offering, starting with PUREVUE, a state-of-the-art imaging platform for the more than 18 millionendoscopic procedures performed annually1
1. Perry, Anne F., et al. “Burden of Gastrointestinal Disease in the United States: 2012 Update” Gastroenterology. 2012 November; 143(5): 1179-11872. Based on internal estimates
Comprehensive Portfolio inHip and Femur Fracture Repair
Digital Solutionsto Surgery
Portfolio Enhancements
Meaningful innovation that improves patient outcomes,reduces procedure complexity and enhances surgeon experience
TFNA Augmentation
FemoralNeck System MAXFRAMEFemoral
Recon Nail
Trauma: Most Comprehensive Portfolio ofBest-in-Class Products
Strengthening Our Go-to-Market Model
Strong cadence ofproduct launches
Digitally enabled solutions to disrupt the market
New go-to-market models drive market
share and growth
Delivering commercial and supply chain
execution
Robust Plan: Return to Above Market Growth in Orthopaedics
Attractive growing markets
Increased NPI cadence
Disruptive digital technologies
Strong focus on execution
Strong-differentiated portfolio
24
Appendix
Hips
Strategic Initiatives
• Drive growth in CORAIL and PINNACLE brands worldwide via evidence generation
• Global expansion of the Anterior Approach bundle technologies launched in 2017: Digital Surgery (Joint Point), ME impactor
• Global expansion of the ACTIS Total Hip System
• Deliver Enabling Technologies to improve outcomes and reduce costs
• Expand presence in dual mobility market
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
2.1% #2 ~2% ~$7.1B
ACTIS Hip StemJoint Point
ME Impactor
1 Operational2 Internal estimates
25
Knees
Strategic Initiatives
• Continue global expansion of ATTUNE Primary Knee System with availability of ATTUNE five year evidence data and investment in Tune In campaign
• ATTUNE Platform growth driven from global market availability of NPIs: S+ (FB & RP), ATTUNE Revision, Stemmable Tibia and Cementless RP
• Transform knee procedures for outcomes and cost to serve via INTUITION SOLO
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
(0.3%) #3 ~3% ~$8.8B
ATTUNE Knee
Revision Systems
INTUITION SOLO Instruments
1 Operational2 Internal estimates
Note: Knees includes TKA, excludes HA and Sports Emerging Technologies
ATTUNE Cementless for biologic fixation
26
Shoulders
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
(1.2%) #3 ~7% ~$1.9B
Strategic Initiatives
• Enhance key growth drivers ‒ DELTA XTEND Reverse Shoulder System‒ GLOBAL UNITE Platform Shoulder System
• Increase surgeon adoption rates of GLOBAL ICON Stemless Shoulder OUS
• Establish technology leadership in personalized solutions – TRUMATCH
DELTA XTEND Reverse Shoulder System
1 Operational2 Internal estimates
Note: also includes sales related to ankles, fingers, wrists and elbows
GLOBAL ICONStemless Shoulder
27
Trauma
Strategic Initiatives
• Strong performance in core platforms with TFN-ADVANCED Proximal Femoral Nail and introduction of anatomic VA Locking Hand System
• Expanding our competitive and more complete portfolio in the elective foot market with expanded indications for Continuous Compression Implants (BME acquisition)
• Transform knee procedures for outcomes and cost to serve via Distal Radius Sterile Kits
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
1.5% #1 ~4% ~$9.1B
Variable Angle (VA) Locking Hand System
TFN-ADVANCED™ Augmentation
Distal Radius
Sterile Kits
1 Operational2 Internal estimates
28
Spine
Strategic Initiatives
• Strengthen Our Core Close key portfolio gaps and update key
spine platforms with CONCORDE Lift, PROTI 360, and SYMPHONY OCT Platform
Continued simplification of current portfolio improved focus on commercial execution,
investment in professional education and enhanced access to instrument sets
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
(6.0%) #2 ~1% ~$10.1B
• Less Invasive Surgery Reduce the impact of surgery on
patients Improve clinical and cost outcomes Normalize surgeon variation Move to outpatient
• Address the Aging Spine Better diagnostics Slow / halt / reverse DDD
Spine MIS* and navigation solutions
Concorde Lift G3+ spine cages
Expedium Verse
1 Operational2 Internal estimates
* Minimally Invasive Surgery 29
Sports Medicine
Strategic Initiatives
• Drive market leading growth in MONOVISC and ORTHOVISC to become the #1 U.S. Hyaluronic Acid market leader in 2018
• Continue global launch of visualization tower
• Deliver pipeline of innovation in minimally invasive mobility therapies
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
3.4% #3 ~5% ~$7.9B
1 Operational2 Internal estimates
30
Michael del Prado
Shaping theFuture of Surgery
Company Group Chairman Ethicon, Advanced & General Surgery
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
Pressing Unmet Needs in Surgery
32%of the global burden of
disease can be attributed to surgically treatable conditions1
5Bpeople are unable to access surgical care2
new cases of surgically relevant cancers diagnosed annually worldwide2
10MM
1. Lancet Apr 20152. World Health Organization, Globocan 2012; Cancer incidence for Colorectal, Lung, Liver, Pancreas, Esophagus, Gastric, GYN, Breast and Urology
Addressing the World’s Most Critical Healthcare Issues
Core Specialties:
High ComplicationRates and Mortality
Colorectal surgery has 11% & 23% (30 & 90 day)
readmission rates.7
Colorectal
211 million obese adults are surgically eligible;
fewer than 1% get surgery.6
Bariatric and Metabolic
Limited Access to Treatment
Lung Cancer is the leading cause of cancer death worldwide:
1.7MM deaths in 2015
>60% of the patients with primary Lung Cancer
have one-or-more comorbid conditions8
Lung
High Co-morbidities
Complications due to bleeding, leaks and surgical
site infections contribute more than $5B in healthcare cost.1-5
General Surgery
Increasing Healthcare Costs
Cancer Specialties:(Surgery and Ablation)
1. CDC (Centers for Disease Control and Prevention). Direct Medical costs of Healthcare-Associated Infections in US Hospitals and Benefits of Prevention. 2009.2. AHRQ (Agency for Healthcare Research & Quality). Healthcare Cost and Utilization Project. 2018. 3. Yoo, et al. Burden of Air Leak Complications in Thoracic Surgery Using a National Hospital Billing Database. ClinicoEconomics and Outcomes Research. 2017. 4. Hammond, et al. Burden of Gastrointestinal Anastomotic Leaks: Evaluation of Clinical and Economic Outcomes. Journal of Gastrointestinal Surgery. 2014.
5. Corral, et al. Health and Economic Outcomes Associated with Uncontrolled Surgical Bleeding. ClinicoEconomics and Outcomes Research. 2015. 6. Bhogal et al. Inequity to the Utilization of Bariatric Surgery: a Systematic Review and Meta-Analysis. 20157. Source: Wick EC1, Shore AD, Hirose K, Ibrahim AM, Gearhart SL, Efron J, Weiner JP, Makary MA. Dis Colon Rectum. Readmission rates and cost following colorectal surgery. 2011 Dec;54(12):1475-9. doi: 10.1097/DCR.0b013e31822ff8f08. World Health Organization ; Yang et al. Clinical Features of 5,628 Primary Lung Cancer Patients. 2005
Leading the Global Surgery Market
#
Leading the Global Surgery Market
#
Leading the Global Surgery Market
#1
6-7%
#1
3-4%
#2
6-7%
#1
5-6% Market CAGR ‘17-22
Market Position
Energy BiosurgeryWound ClosureEndocutters
$3.7B $4.6B $5.9B $3.6B Market Size 2022
Ethicon $8.2B* Portfolioin ~$23B Global Market (2017)**
2017-2022 Market Growth
6% CAGR**
Emerging Markets Market Growth 11%**
#1 in 3 out of 4 Key Platforms
* 8.2B represents advanced and general surgery ** Internal estimates
Accelerating Our Growth Trajectory
$8.2B* Sales in 2017, Operational Growth** of +4.1%
Consistent Cadence of New
Product Launches
7.4% Endocutter Biosurgery
5.7% Energy
5.7% Wound Closure
4.5%
Strategic Acquisitions:
~1 Point of 2017 Growth
Disciplined Portfolio Optimization
• Invest in high growth • Revitalize selected areas• Rationalize products/SKUs
for profitability and growth
2017 Ops Sales Growth by Platform**
* 8.2B represents advanced and general surgery ** Excludes impact of translational currency
Shaping the Future of Surgery – Driving Our Growth
Creating the Next Frontier of Surgery
• Products that augment surgeon technical and sensory capability intra-operatively
• Digital ecosystem and robotics solution that combines technical, sensory and cognitive products to enable the intelligent OR
• Broad based access to surgery – growth in emerging markets
• Market leading portfolio and strong evidence in cancer and obesity
• Procedural efficiency and reduction in variability
• Biosurgery portfolio and Wound Closure systems to address key unmet needs
• Minimally invasive microwave ablation (MIMA) to become standard of care
• New less-invasive modalities that deliver better outcomes
• Surgical tools, services, and education targeted at reaching the ~5 billion people without access to essential surgery1
Delivering Value Maximizing Solutions
• Business models and services that deliver quality benchmarks at low cost for routine procedures
• Products and services to standardize processes
• Products and solutions that enable data-based insight and decision making
Winning in Open and Lap Surgery Entering High Growth Digital Surgery
1. Lancet Apr 2015
Shaping the Future of Surgery –Driving Our Growth
• Broad based access to surgery – growth in emerging markets
• Market leading portfolio and strong evidence in cancer and obesity
• Procedural efficiency and reduction in variability
• Biosurgery portfolio and Wound Closure systems to address key unmet needs
Winning in Open and Lap Surgery
Shaping the Future of Surgery –Driving Our Growth
• Products that augment surgeon technical and sensory capability intra-operatively
• Digital ecosystem and robotics solution that combines technical, sensory, and cognitive products to enable the intelligent OR
Entering High Growth Digital Surgery
Shaping the Future of Surgery –Driving Our Growth
• Drive minimally invasive microwave ablation (MIMA) to become standard of care
• New less-invasive modalities that deliver better outcomes
• Surgical tools, services, and education targeted at reaching the ~5 billion people without access to essential surgery1
Creating the Next Frontier of Surgery
1. Lancet Apr 2015
Shaping the Future of Surgery –Driving Our Growth
• Business models and services that deliver quality benchmarks at low cost for routine procedures
• Products and services to standardize processes
• Products and solutions that enable data-based insight and decision making
Delivering Value Maximizing Solutions
Maintaining Lead in Open Surgery
Setting the Standard of Care in Wound Closure
Our Ethicon Plus antibacterial sutures are the only sutures coated with triclosan available worldwide
WHO and CDC recommend the use of triclosan-coated sutures to
prevent surgical site infection2
STRATAFIX Spiral Uni and Bidirectional
DERMABONDPRINEO 22/42
Refresh Open Portfolio
Continued innovation in open portfolio to provide superior
technology
First Systematic Approach to Bleeding Management
Optimal hemostat utilization, enabling clinicians and healthcare systems to
maximize healthcare spend
Open Procedures Remain 60% of Complex Surgeries1
1. Premier Perspective Hospital Database for Complex Surgeries in Thoracic, Colorectal and Solid Organ 2. The CDC and WHO guidelines on reducing the risk of surgical site infections are general to triclosan-coated sutures and are not specific to any one brand
Addressing Unmet Needs in Minimally Invasive Surgery
Advanced Stapling with Real World Evidence
Associated with quantifiably better outcomes – reducing hemostasis
complications by more than 40% in bariatric and thoracic cases1,2
Delivering Growth ThroughNew Technologies
Superior control of moderate-severe regurgitation
at 6 months, compared to proton pump inhibitors3
1. Use of Ethicon powered staplers was associated with fewer bleeding/transfusion complications (1.61%) compared to Medtronic nonpowered staplers (3.05%), p=0.010, in laparoscopic Sleeve Gastrectomy and Roux-en-Y Gastric Bypass procedures. Based on retrospective analysis of 21,466 cases from the Premier Perspective® Hospital Database.
2. Ethicon retrospective analysis of clinical outcomes between Echelon Powered vs. Medtronic nonpowered endoscopic surgical staplers among patients undergoing video-assisted thoracoscopic surgery lobectomy. Review of 1,501 cases between 2012 and 2015 from the Premier Healthcare Database (4.8% vs 14.2%; p=0.0098)
3. This data was presented at Digestive Disease Week 2017 (DDW) in Chicago, IL, by Dr. Reginald Bell, SurgOne Foregut Institute, Englewood, CO.
Total Energy Solutions
The most comprehensive portfolio of intelligent energy solutions designed to deliver greater
innovation and value
Open Surgery
Laparoscopic Surgery
Digital Surgery
Robotic SurgeryA Bridge Between Lap and Digital Surgery
Improvement
Time
Transforming Robotics to Digital Surgery
– Access and reach– Footprint and cost– Workflow– Advanced instrumentation
Poised to Disrupt the Fast-Growing Robotics Market
• On track to be in market by 2020
• Differentiated system at launch– Access and reach– Footprint and cost– Workflow– Advanced instrumentation
• Many customers engaged with positive feedback
• Architected to deliver on the promise of the digital ecosystem
Poised to Disrupt the Fast-Growing Robotics Market
• On track to be in market by 2020
• Differentiated system at launch– Access and reach– Footprint and cost– Workflow– Advanced instrumentation
• Many customers engaged with positive feedback
• Architected to deliver on the promise of the digital ecosystem
Poised to Disrupt the Fast-Growing Robotics Market
• On track to be in market by 2020
• Differentiated system at launch– Access and reach– Footprint and cost– Workflow– Advanced instrumentation
• Many customers engaged with positive feedback
• Architected to deliver on the promise of the digital ecosystem
Poised to Disrupt the Fast-Growing Robotics Market
• On track to be in market by 2020
• Differentiated system at launch– Access and reach– Footprint and cost– Workflow– Advanced instrumentation
• Many customers engaged with positive feedback
• Architected to deliver on the promise of the digital ecosystem
Creating the Next Frontier of Surgery
Thermal Ablation
NeuWave: Ablation confirmation, for the first time, allows real-time confirmation of probe placement and technical success
The only FDA cleared flexible microwave ablation probe
Creating the Next Frontier of Surgery
Thermal Ablation
NeuWave: Ablation confirmation, for the first time, allows real-time confirmation
of probe placement and technical success
The only FDA cleared flexible ablation probe
Enhance surgeon’s ability to visualize anatomical
structures and the extent of the disease
Advanced ImagingBiologically TargetedRadiotherapy
Endoluminal Procedures
Integrating the latest advancements in robotics, software, data science and
endoscope innovation
Combines the power of biologic imaging and
radiotherapy ablation to treat cancer
Delivering Solutions toMaximize Customer Value
Omnichannel Training
Evidence
Comprehensive Solutions
Shaping the Future of Surgery
Delivering Value Maximizing Solutions
Creating the Next Frontier of Surgery
Entering High Growth Digital Surgery
Winning in Open and Laparoscopic
Surgery
Continuing Legacy of Shaping Surgery
Accelerating Sequential Revenue Growth
Increasing Global Reach
26
Appendix
Biosurgicals
Strategic Initiatives• Expand hemostasis portfolio through internal innovation and strategic
partnerships to address unmet needs in bleeding management and leaks prevention
• Drive Hemostasis Optimization Program to simplify the category by demonstrating that cost savings and operating room & supply chain efficiencies can be achieved without sacrificing patient outcomes
• Drive product penetration of adjunctive hemostats globally with strong growth in Emerging Markets
• Expand growth in new areas including Total Joint Replacements (Hips and Knees) and leverage partnerships across J&J Medical Devices
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
5.7% #1 ~5% ~$3.6B
1 Operational and includes BCS, TAH, AP, Biopatch2 Internal estimates
27
Energy
Strategic Initiatives
• Strengthen competitiveness with total energy portfolio across open, lap and robotic procedures, through continued innovation in HARMONIC ultrasonic, filling portfolio gaps in ENSEAL advanced bipolar, and globalizing MEGADYNE core energy portfolio
• Penetrate mid-value markets through a segmented portfolio including reprocessing and re-usability
• Expand into new specialties such as hepatobiliary and orthopedics
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
5.7% #2 ~7% ~$5.9B
1 Operational2 Internal estimates
28
Endocutters
Strategic Initiatives
• Deliver tissue-specific innovation across laparoscopic and robotics stapling instrumentation that reduces patient complications in the most challenging oncologic and bariatric cases that is supported by clinical, economic and real world evidence
• Globalize the successful launches of powered GST and vascular platforms that have demonstrated significant reduction in complications and cost
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
7.4% #1 ~6% ~$3.7B
1 Operational2 Internal estimates
29
Wound Closure
Strategic Initiatives
• Establish our differentiated wound closure system (Plus Antibacterial Suture Portfolio, STRATAFIX Knotless Tissue Control Devices, and PRINEO Skin Closure System) as the standard of care for reducing risk of Surgical Site Infections
• Ensure portfolio competitiveness across open, lap and robotic procedures
• Simplify the global sutures portfolio to improve efficiency and customer experience
• Accelerate growth in orthopedics through collaboration across J&J Medical Devices and strategic partnerships
2017SALES CHANGE1
2017 WWMARKET POSITION2
WW MARKET2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
4.5% #1 ~3% ~$4.6B
1 Operational2 Internal estimates
30
Peter Shen, PhDEuan Thomson, PhD
Innovation
Global Heads, R&DJohnson & Johnson Medical Devices Companies
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
Interventional Solutions
Surgery
Orthopaedics
Eye Health
Robust Pipelineof MeaningfulInnovation
2018
New Products
15-20
Robust Pipelineof MeaningfulInnovation
2019
New Products
20-25
Robust Pipelineof MeaningfulInnovation
2020+
New Products
40-50
Robust Pipelineof MeaningfulInnovation
7B$
in new productsales in 2022*
*Excluding external innovation
Accessing the Best Technologies to Improve Outcomes
$5 BIn Acquisitions and Strategic Partnerships
Filling Portfolio
Gaps
Building Capabilityto Accelerate and
Onboard Early Stage Technologies
Early Entry into Cutting Edge Technology
30+ Transactions in 2017
Our Digital Surgery Insights
Greater global access with smaller footprintand flexible design
New approaches to learning
Better user experience with unique consoleand connection
Optimized patient access and workflow
Enable a broad range of procedures
Advanced instruments and enhanced visualization
Our Digital Surgery Insights
Greater global access with smaller footprintand flexible design
New approaches to learning
Better user experience with unique consoleand connection
Optimized patient access and workflow
Enable a broad range of procedures
Advanced instruments and enhanced visualization
Verb Surgical Platform
Our Digital Surgery Insights
Greater global access with smaller footprintand flexible design
New approaches to learning
Better user experience with unique consoleand connection
Optimized patient access and workflow
Enable a broad range of procedures
Advanced instruments and enhanced visualization
Verb Surgical Platform
Our Digital Surgery Insights
Greater global access with smaller footprintand flexible design
New approaches to learning
Better user experience with unique consoleand connection
Optimized patient access and workflow
Enable a broad range of procedures
Advanced instruments and enhanced visualization
Verb Surgical Platform
Achieving Key Milestones for the Verb Platform
COMMERCIALIZATION EXPECTED IN 2020
Conducting pre-submissionmeetings with global regulatory agencies
Completing procedure development in
pre-clinical setting
Scaling our capabilities in commercial, service, supply
chain and education
Multiple working prototypes
Digital Surgery Solutions to Address Unmet Needs
Improving the Standard of Care Through Orthopaedic Robotics
Increased operating room efficiency
Reduced burden on surgeons and staff
Minimized variability
Improved reproducibility
Optimized footprint
Innovation to Automate and Improve Procedure Efficiency
Surgical Process Institute
Guide and standardize the surgical steps in the procedure and improve
overall operational efficiency
ME Impactor
More precisely seat uncemented femurs and tibias in a more
ergonomic fashion
Orthotaxy
Create and follow a surgical plan while performing more accurate
femoral and tibial cuts
Expect to Reduce Procedure Time By 30%
Hospital Information/Electronic Records Integration
PRE-OP
Apps
Wearables
PlanningSoftware
INTRA-OP
VisualizationNeuromonitoring
Imaging
POST-OP
Sensors
Wearables
Apps
Robotics
Data/Analytics
Digital Surgery: Beyond Robotics
We Have Built Digital Technologies Across the Continuum of Care
Patient view provides behavior
change
Web-based surgical planning
and tracking software guide
Portable, highly accurate next
generation robotics assisted platform
Innovative solution to improve
operating room efficiency and
patient outcomes
Performance management to assessand improve surgical
procedures
Provider view providesa platform to engagepatients and support
and monitor progress and outcomes
INTRA-OP POST-OPPRE-OP
Strong cadence of meaningful innovation fueling long-term above market growth
Focus on driving meaningful clinical and economic value
Digital surgery goes beyond robotics to the entire continuum of care
Delivering Innovation That Matters
Ashley McEvoy
Leading in Eye Health
Company Group Chairman,Johnson & Johnson Vision
Cautions Concerning Forward-looking StatementsThese presentations and exhibits contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things: future operating and financial performance, product development, market position and business strategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to: economic factors, such as interest rate and currency exchange rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges inherent in new product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and existing products; challenges to patents; the impact of patent expirations; the ability of the company to successfully execute strategic plans, including restructuring plans; the impact of business combinations and divestitures; manufacturing difficulties or delays, internally or within the supply chain; product efficacy or safety concerns resulting in product recalls or regulatory action; significant adverse litigation or government action, including related to product liability claims; changes to applicable laws, regulations and government policies, including tax laws and global health care reforms; trends toward health care cost containment; changes in behavior and spending patterns of purchasers of health care products and services; financial instability of international economies and legal systems and sovereign risk; increased scrutiny of the health care industry by government agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in the company’s subsequent Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, www.jnj.comor on request from Johnson & Johnson. Any forward-looking statement made in these presentations and exhibits speak only as of the date of these presentations and exhibits. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.
Cautionary Note on Non-GAAP Financial MeasuresThese presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying financial schedules of the earnings release and the Investor Relations section of the Company’s website at www.investor.jnj.com.
During the course of today’s presentations, we will discuss a number of products developed in collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those relationships:
Strategic Partnerships, Collaborations & Licensing Arrangements
Consumer RHINOCORT licensed from AstraZeneca; Dr. Ci:Labo brand skincare products in collaboration with Ci:z Holdings Co., Ltd.
Orthopaedics MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.; Digital Ortho Tools developed in collaboration with Brainlab; FIBERGRAFT Family of Products exclusive U.S. promotional agreement with Prosidyan, ViviGen Bone Regeneration in collaboration with LifeNet Health; ME1000 Surgical Impactor co-marketed with Medical Enterprises Distribution, LLC; SERF Dual Mobility System licensed from Société d’Etude, de Recherche et de Fabrication; PROTI 360 developed in collaboration with Tyber Medical; Joint Point co-marketed with JointPoint, Inc.
Surgery Verb Surgical robotics platform in development with Verily Life Sciences
Vision LipiView II licensed from Orb Royalty; ACUVUE OASYS with Transitions Light Intelligent Technology developed in collaboration with Transition Optical, Inc.; Xlens in collaboration with IBM
Sight is Our Most Precious Sense
Our MissionBringing science and the
sense of sight to life through world-class innovation and
customer experience.
of what we learn is through
our eyes2
80%
of people fear losing their sight more than
any other sense3
of visual impairments
are treatable if discovered early4
50% of World Needs Vision Correction; 10% are Treated1
1. The challenge of providing spectacles in the developing world: Holden Brien, et. al.2. J Zaba. Journal of Behavioral Optometry. Volume 22, 20113. Lighthouse international 2010 Harris Survey4. The World Health Organization Visual impairment and blindness Fact Sheet N°282 August 2014
Eye Health is a Large and Growing Category With Significant Unmet Patient Need$80B Market Globally; Growing at 5% CAGR1 2017- 2022
Dry Eye is a $3.7B category; growing at 6% CAGR5
• >340MM globally suffer from Dry Eye5
• ~86% of people with Dry Eye suffer from Meibomian Gland Dysfunction (MGD)6
Cataract Surgery is a $5B category; growing at 4% CAGR2
• Most common surgery performed globally and #1 cause of preventable blindness3
• Premium IOL penetration is fastest growing segment, yet under-indexed at 12% in the U.S. and < 3% in India & China3
J&J Vision has breadth and depth to grow these markets and become a world leader in Eye Health
Contact Lenses are a $8B category; growing at 5% CAGR4
• Penetration remains low, <10% globally4
The Laser Vision Correction market is $0.7B; growing at 3% CAGR1
• Penetration rates are low (<5%)1
1. Internal Estimates2. 2017 Market Scope Global Cataract Surgery Equipment Report + Internal Estimates, Data on File3. 2017 Market Scope Global IOL Report
4. Euromonitor + Internal Estimates 5. 2017 Market Scope Dry Eye Report6. Michael A. Lemp, MD, et. al., Cornea 2012
Starting From a Leadership Position in Contact Lenses, We are Transforming into an Eye Health Company
3
Dry Eye1st FDA-cleared treatment for MGD, the leading cause of Dry Eye5
Contact Lenses1
#1 Contact lens brand#1 Daily disposable#1 Reusable contact lens#1 Daily disposable Beauty contact lens
Ophthalmic Surgery#1 LASIK2
#1 Premium IOL3
#2 Cataract surgery equipment4
Connected CommerceBest-in-class omnichannelexperience meeting consumers where they are, including new subscription model
Backed by Johnson & Johnson Enterprise Capabilities
1. Euromonitor2. 2017 Market Scope Refractive Surgery Report3. 2017 Market Scope Global IOL Report + Internal Estimates
4. 2017 Market Scope Global Cataract Surgery Equipment Report + Internal Estimates5. TFOS DEWS II Definition and Classification Report
Total JJV sales for 2017$4.3B, grew +6.5%2
Contact Lens grew sales at or above the market for
Sales of $3B andgrew 6% in 20173
Surgical grew salesat +10% in 20172
Cataract business surpassed$1B in sales in 2017, +13%2
Premium IOLs have outpaced market
growth (2X)4
J&J Vision is Delivering Consistent Above Market Performance1
1. Internal Estimates2. Proforma Results3. Operational Growth, excludes impact of translational currency4. 2017 Market Scope Global IOL Report
11consecutive quarters1
Our Contact Lens Business Has Delivered 11 Quarters of Market-Leading Performance1
7 New Products Launched Since 2015
Beauty Contact LensACUVUE Define
#1 Selling Daily Disposable Beauty Contact Lens4
7 new designs launched since 2015
Monthly Reusable Contact LensACUVUE Vita
First Time Full Family Launched Within 1 Year
Daily Disposable Contact LensACUVUE Oasys
#1 Selling Contact Lens Brand In The World4
1. Internal Estimates2. Reported Sales (Rounded)3. Approximate total lenses produced in 2017 rounded4. Euromonitor International
Most Trusted Brand - Survey conducted 12/2016 to 2/2017. Aggregated sample comprises 1,050 Eye Care Professionals from the U.S., UK, Russia, Japan & S. Korea markets, representing over ⅔ of global contact lens retail sales
ƚ
>30% Specialty (astigmatism, presbyopia, and beauty)
and grew double digits in 20172
OF REVENUE
ACUVUE Oasys & ACUVUE Moist2
Two $1B+ brands
~5BLenses manufactured
each year3
$3Bin revenue2
~50MMconsumers wear
ACUVUE every day1
ƚ
World-class researchers with deep vision expertise
Strong Foundation in Ophthalmology with Acquisition of #2 Eye Surgery Company1
WORLD’S 1ST extended depth of focus IOL
Premium IOL penetration is under-indexed2
Material Science
Optical Engineering
Broad Eye Expertise
Manufacturing
Strong Surgeon Partnerships
Seamless Acquisition
• 5,000 new employees in 37 countries3
• Transitioned consumer eyehealth products to Contact Lens business, rebranding key products to leverage ACUVUE equity
• No customer disruptions
• Value capture is on track
• Completed complex integration and delivered strong first-year results, exceeding deal-model targets
Markets where we have IOL leadership position
Canada Korea
Germany
UK / Ireland
1. 2017 Market Scope Refractive Surgery Report combined with internal estimates2. 2017 Market Scope Global IOL Report3. Internal HR estimates
Fastest growing lens in premium IOL segment2
Expanded Family by Acquiring First FDA-Cleared Treatment1 for Leading Cause of Dry Eye2
• >340MM people suffer from Dry Eye globally3
• ~86% of all Dry Eye patients have Meibomian Gland Dysfunction (MGD) 4
• The first FDA-cleared treatment for MGD
• Patients present with symptoms to all our customers: ophthalmologists, optometrists and opticians
A growing epidemic that is underdiagnosed and undertreated
Normal Meibomian Gland Structure Meibomian Gland Dropout
1. First Electronic Treatment cleared by FDA2. TFOS DEWS II Definition and Classification Report3. 2017 Market Scope Dry Eye Report4. Michael A. Lemp, MD, et.al., Cornea 2012
Creating Convenient, Globally Connected SolutionsDelivering a seamless omnichannel experience designed to reduce friction in the system and better connect consumers and ECPs for a superior eye health experience
JNJVISIONPRO.COM• A personalized, consolidated resource for
ECPs, staff and students• 1.5X Engagement from professionals2
Enhanced In-office Experience• Personalized patient experience
through lens selection and education• Evolved practice management–Smart lens dispensing unit –Audit tools to manage inventory
5x faster1
–Big data, analytics to further drive efficienciesMyACUVUE
• >3MM MyAcuvuemembers in Asia1
• Chatbot drives real-time consumer engagement using AI
• Personalized content is driving +5pt YOY new wearer acquisition1
IOL Express• Forward stocking locations
to allow surgical vision to get closer to the customer with real-time delivery
Sightbox• Convenient, membership-based service
for contact lens wearers in the United States• Coaching, education• Making it easy = staying in the category
1. Internal Sources2. Google Analytics Site Traffic, March 2018
2017 E-commerce sales up
+15%vs PY1
Our Growth Acceleration Strategies
Strong commercial execution, innovative business models and fast-moving supply chain to deliver superior eye health experiences
Seasoned globally diverse team dedicated to a noble purpose to protect and enhance sight
Differentiated and optimized portfolio to deliver short- and long-term growth
Insight-driven innovation (organic and inorganic)
To continue to deliver consistent above market growth
Xiao-Yu Song, MD, PhD
Innovation
Worldwide R&D LeaderJohnson & Johnson Vision
Delivering value across a lifetime of patient eye health needs
Pioneering the Future of Eye Care
PRESBYOPIA CATARACTSDRY EYE GLAUCOMA AMD
Great Insights
Internal / External R&D TechnologiesIconic Brand
BEAUTYPROGRESSIVE MYOPIA HYPEROPIA ASTIGMATISMMYOPIA
ALLERGY
Patient-Focused and Science-Based Innovation to Deliver Better Surgical Outcomes
Creating the Next Generation Refractive Laser
Building a Best-in-Class Cataract Surgical Suite
Expanding our Dry Eye Portfolio
Next Generation Symfony*Designed to improve near vision
Enhanced IOL Innovation with Focus on Premium Needs
Pipeline is optimized and focused
*This product is under development and not approved or cleared by FDA, and is not available for sale or commercial use in any market
Pipeline will Address New Need States with Breakthrough Contact Lens ProductsOn schedule to deliver 2 product launches per year through 2022
Introducing
Intelligent contact lenses that adapt to the light in your busy life
ACUVUE OASYS with Transitions Light Intelligent Technology
Drug Combination Contact Lenses*Designed to be a
combination product for relief of eye allergy itch
Xlens*World’s first smart contact lens
Targeting dynamic solution for presbyopia
Technology development for myopia control, dry eye symptoms, and custom lenses
First in Class 150 patents granted
First in Class
*These products are under development, are not approved or cleared by FDA, and are not available for sale or commercial use in any market
The Power of J&J Strengthens Our Competitive Advantage • Supply Chain is a competitive advantage, delivering
best-in-class COGs– New 5th generation manufacturing platform
Half the space, double the output, 35% contact lens cost reduction1
– Increased sustainabilitySolar panel farm and windmills have helped contribute to 30% reduction in utilities cost per lens1
• Accessing Johnson & Johnson signature capabilities– Patient insights from deep data science
– Upskilling doctors via 26 teaching institutes
– E-commerce and digital
– Accessing best-in-class expertise across scientific fields
1. Internal Estimates
We have a Bold Ambition to be a World Leader in Eye Health
We expect to continue delivering above market
performance1
We are creating solutions to address a lifetime of
patient eye health needs
We are leading with new ways of working to drive the market and
delight patients
We are leveraging the best of J&J
Helping people honor their eyes
1. Internal Estimates
19
Appendix
Vision Care*
Strategic Initiatives
• Drive contact lens penetration rates and successfully increase net new wearers
• Elevate the eye health experience with integrated, personalized and connected digital solutions
• Bring forth innovation that goes beyond vision correction to help reignite interest in the category
20
2017 SALES CHANGE1
2017 WW MARKET POSITION2
WW Market2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
5.2% #1 ~5% ~$13.6B
1 Operational on a pro-forma basis2 Internal estimates
* Vision Care market includes Contact Lens, Contact Lens Care (Solutions), and Dry Eye OTC
Surgical Vision
Strategic Initiatives
• Successfully integrate acquired companies; drive +10 pts of gross profit improvement
• Drive growth in the premium IOL segment and a superior eye health experience
• Prioritize and Optimize: Enrich the pipeline and create a sustainable corneal refractive business
21
2017 SALES CHANGE1
2017 WW MARKET POSITION2
WW Market2017-2022 CAGR2
TOTAL WW MARKETREVENUE 20222
10.0% #2 ~5% ~$7.2B
1 Operational on a Pro-forma basis2 Internal estimates incl. Cataract + Refractive + Dry Eye Procedures (excl. OTC and Rx)