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JANUARY 15, 2020
J.P. Morgan Healthcare Conference
John Groetelaars, President and CEO
This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of1995. All statements included herein that are not historical facts are forward-looking statements, including without limitationstatements regarding Hill-Rom’s ability to drive sustainable profitable growth and shareholder value, the timing and successof new product launches and portfolio expansion, the achievement of long-range financial objectives, the continuation ofstable customer demand trends, a stable U.S. capital environment, the timing and success of M&A and businessoptimization initiatives, our ability to reduce debt, implementation of our IT transformation, the impact of tariffs, any changeto the one-time impact from U.S. tax reform legislation, and all other statements concerning future strategy, plans,objectives, projections, expectations and intentions. Such forward-looking statements involve a number of risks anduncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Hill-Rom’s resultscould be materially adversely affected. For a more in-depth discussion of factors that could cause actual results to differfrom those contained in forward-looking statements, see the discussions under the heading “Risk Factors” in the company'spreviously filed most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Except as requiredby applicable law or regulations Hill-Rom assumes no obligation to update or revise any forward-looking statements.
Certain financial figures presented herein have been presented on an adjusted basis (non-GAAP). Reconciliation betweennon-GAAP financial measures and reported GAAP financial measures are included on the Hillrom Investor Relations page.
Hill-Rom’s results contained herein reflect the new revenue recognition accounting standard, ASC 606, which Hill-Romadopted on a modified retrospective basis beginning in the fiscal first quarter 2019. All comparisons contained herein willinclude the new standard for the current and prior year periods.
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© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Forward Looking StatementsAnd Non-GAAP Financial Measures
3
OUR MISSION
Enhancing outcomes for patients and their caregivers
Hillrom
OUR VISION
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
4
Patient
Support
SystemsFront
Line Care
Surgical
Solutions
$2.9BFY 2019
Leadership
2019 Revenue by BusinessUS$ Billions
Global medical technology leader with a diversified portfolio across care settings
FY 2017 FY 2018 FY 2019
$150M+
$300M+
$450M+
Innovation
New Product RevenueUS$ Millions
Advancing category leadership with healthcare solutions
Transforming to drive sustainable profitable growth and shareholder value
Value
Market
Capitalization
Enterprise
Value
Fiscal 2019
Returned to
Shareholders*
$7.6B $9.8B
$177M+29%LTM Total
Shareholder
Return*
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Key Valuation MetricsAs of 12/31/2019
Hillrom: A Trusted Medical Technology Innovator
Note: Hillrom’s fiscal year end is September 30; *Includes dividends and share repurchases
Driving operational execution and strong financial performance• Drove accelerated core revenue growth and margin expansion while investing for future growth
• Exceeded revenue and EPS guidance each quarter
Expanding internationally and penetrating emerging markets (EM)• Realigned international operations with new leadership, improved visibility and performance
• Reinvigorated emerging markets with targeted investments to drive accelerated top-line growth
Transforming the portfolio with select M&A and optimization initiatives• Executed disciplined M&A strategy with the acquisition of Voalte® and Breathe Technologies
• Redirected resources toward higher-growth opportunities with divestiture of surgical consumables
Advancing category leadership with differentiated solutions and innovation• Achieved $450M+ in new product revenue; exceeded 2020 objective one year early, above goal
• Launched new and unified Hillrom brand, EarlySense, WatchCare™ and Welch Allyn® RetinaVue® 700 Imager
5
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Hillrom: 2019 Highlights
Enhancing Shareholder Value By Executing Our Strategy
FY 2018 FY 2019
$2.8B
$2.9B
GlobalRevenue
FY 2018 FY 2019
17.0%
17.8%
OperatingMargin
FY 2018 FY 2019
$4.65
$5.08
Adj. EarningsPer Share
FY 2018 FY 2019
$395M$401M
OperatingCash Flow
6
+80 BPSMargin
Expansion
+2%GrowthCore*
Growth
+6%Core Ex.
Acquisitions
+7% +14%Growth
Ex. SBC**
+9%Growth
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Achieving Strong 2019 Financial Results
Accelerating Core Revenue Growth While Delivering Strong Earnings & Cash Flow
Note: Axis not to scale; Adjusted gross margin, operating margin and EPS are non-GAAP measures. See reconciliation to reported GAAP numbers in the
appendix to this presentation; *Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions
international OEM business; **Stock based compensation (SBC) tax benefit was $0.07 per diluted share in FY 2019 and $0.24 per diluted share in FY 2018
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
6%
4%
8%
6%
7
100+ BPS
150+ BPS
Core Growth Impact of Acquisitions
2%
6%
2%
4%
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Accelerating Core* Revenue Growth
*Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions international OEM business
$6B+
$2B+
$1B+
$4B+ $4B+
$9B+
$7B+
+1% - 3% +6% - 7% +3% - 5% +2% - 4% +1% - 3% +5% - 6% +1% - 3%
2%-3%WAMGR
8
Smart Beds,
Surfaces &
Mobility
Care
Comms
Respiratory
Health
Physical
Exams &
Diagnostics
Vision
Screening &
Diagnostics
Surgical
Workflow &
Positioning
Patient
Monitoring
MARKET GROWTH
$33B+Global Market
Opportunity
HRC GROWTH RELATIVE TO
MARKET GROWTH(2019 - 2022)
PSS
FLC
Surgical
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Diversifying Portfolio Across Key Care Categories
Non-Core Revenue
9
FY 2018 FY 2019 FY 2020
Outlook
FY 2021
Outlook
FY 2022
Outlook
~$210M
~$150M
~$25M
~$0M ~$0M
$300M+Divested
Annualized Revenue
~80%
~30% ~20%
~70%
Revenue Mix% of Total Revenue ~30%
2022 Revenue
Growing Double Digits
<4% Growth >4%+ Growth
10%+ Growth
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
FY 2017 FY 2022
Outlook
FY 2017
Transforming Portfolio To Drive Higher Durable Growth
FY 2022
Outlook
10
$27B
$36B
2.5M
80%+
$426K
Key Healthcare
Challenges
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Creating Value Across The Care Continuum
Note: See references
Advancing Connected Care With Strong Value Proposition
RetinaVue®
ImagerSpot™ Vision
Screener
90%
Diabetic Retinal Exam Compliance Rate7
87%
Vision ScreeningCompletion Rate6
62%
11
Centrella®
Smart + BedConnex®
Spot Monitor
Reduction InTotal Falls With NaviCare®
Patient Safety System9
Monarch® AirwayClearance System
20%
Life2000®
Compressor
68%
Reduction In In-Patient Admissions With Vest Therapy10
IN T
HE
OFFIC
E
IN T
HE
HO
SPIT
AL
IN T
HE
HO
ME
Integrated Table Motion
20 min
Average Time Saved Per Surgery
Due To ITM8
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Note: ITM – Integrated Table Motion; NIV – Non-Invasive Ventilation. See references
Reduction In ER Visits With NIV Therapy11
Centrella® Smart+ Bed
Vital Signs Monitoring
NaviCare® Patient Safety System
Liko® Smart Lift
WatchCare™ Incontinence
Continuous, Contact-Free HR/RR Monitoring
Third-Party Medical Devices
12
~1
.3M
Co
nn
ec
tab
le H
illr
om
De
vic
es
CONNECTED CARE SOLUTIONS
Data
Hillrom Digital Health Gateway
REAL-TIME CLINICALCOMMUNICATIONS
NURSE CALL
MOBILITY SOLUTION
INTEROPERABILITY
PREDICTIVE ANALYTICS
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Connecting Care With Our Digital Ecosystem
Insights Action
Five people die from sepsis every hour in the UK; earlier detection and medical intervention could
help prevent such tragedies
13
7 patients rescuedclinically significant detections of patient deterioration in a 26-bed
unit over a 90-day period13
9 minutes
54 minutes
Reduction In Exposure12
WatchCareTM EarlySenseTM
Exclusive partnership with the UK Sepsis Trust – Provides awareness and training to UK hospitals on how to use existing technology to identify deteriorating patients earlier
UK Sepsis Trust
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
WatchCare™ Incontinence Management System – Provides real-time incontinence alerts to help reduce patient exposure to moisture
Heart Rate and Respiratory Rate Monitoring – Provides contact free continuous monitoring of respiratory rate and heart rate to enable earlier detection of patient deterioration
Enhancing Outcomes With Real-Time Interventions
Note: See references
14
NURSE CALL: NAVICARE®
MOBILITY SOLUTION: VOALTE®
INTEROPERABILITY PREDICTIVE ANALYTICS
Demonstrating Category Leadership With Only
Comprehensive Solution In Underpenetrated $5B+ Market
100%penetrated
< 25%penetrated
< 20%penetrated
< 10%penetrated
TAM
~$0.4B
TAM
~$2.1B
TAM
~$1.6B
TAM
~$1.0B
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Solving Unmet Needs With Digital Innovation
Note: TAM – Total addressable market. TAM and penetration rates represent U.S. market across category only
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REAL-TIME WAVEFORMS
ALERT & ALARM MANAGEMENT* ALARM STRIPSALARM TRENDS
Alarm Navigator: Reporting on alarms on a unit, facility or
IDN basis
Allows for clinical assignments,
filtering, routing and escalation
Capture and display waveforms digitally
on computer, tablet or mobile device or
within the EHR
Storing waveforms in digital format for
reference and trending information
© 2020 Hillrom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Improving Clinical And Economic Outcomes With Integrated Mobile Platform
Delivering Real-Time Digital Solutions And Insights
*Product in development, launching in 2020
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Advancing category
leadership with
differentiated solutions
and innovation
Expanding
internationally and
penetrating emerging
markets
Transforming the
portfolio with select
M&A and optimization
initiatives
Driving operational
execution and strong
financial performance
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Executing Our Strategic Priorities
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New Product Revenue
FY 2017 FY 2019 FY 2022
$150M+
$450M+
$750M+
$250M+
WatchCare™
Incontinence*
$1B+
SmartBeds
Significant Market Potential
$2B+
CareCommunications
$400M+
VisionScreening
$300M+
AutomatedVitals Market*
$1B+
Respiratory Airway Clearance & NIV*
2020 New Product Launches
Volara™
Digital Health Offering(Patient Deterioration & Falls)
Mobile Surgical TableYellofins Apex™
Adaptable Therapy Med-Surg Surface
PSS
FLC
Su
rgic
al
DigitalPhysical Assessment
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
PSS
FLC
Surgical
Delivering Differentiated Solutions And Innovation
Contributing Annual Growth Of ~200 BPS From New Products
Note: NIV - Non-Invasive Ventilation; *U.S. market potential only
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FY 2019 FY 2022
International Revenue Penetration
+LSDInt’l Developed
2019 - 2022 CAGR
+DDEmerging Markets2019 - 2022 CAGR
Int’l Developed Emerging Markets
~70%~60%
~30%
~40%
• Unleashing untapped potential by
expanding penetration from ~9% of
revenue today to double digits
• Focusing investment and developing
market for targeted product categories
• Strengthening Hillrom’s leadership in
primary care and driving demand
• Reducing international volatility with
improved EM growth
• Enhancing visibility while managing
distributors and channel effectively
Emerging Market Drivers
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Expanding Internationally And Penetrating EM
Delivering ~100 BPS Of Growth From Emerging Markets
Note: LSD - Low-Single Digits, DD - Double Digits
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• Advancing our Advancing Connected CareTM vision
• Providing real-time insights at point of care
• Integrating Voalte into our digital offering and Care Communications business
• Leveraging strong Hillrom acute care relationships
• Utilizing smart phone platform to enhance clinical workflows
Breathe Technologies AcquisitionVoalte Acquisition
Americans with COPD
Addressable COPD Market (Stage 4)
NIV MarketGrowth
30M+ $4.5B+ 10%+Devices on Voalte’s
Mobile PlatformMarket
Growth Rate
93K+ 15%+ Total Addressable
Market
$5B+
• Addressing growing market needs
• Shifting care closer to home with a mobile solution
• Strengthening our Respiratory Health portfolio
• Leveraging existing customer base and business model
• Adopting NIV therapy drives 91% compliance within
1 year of adoption14; may reduce ER visits by 68% and
total costs by 79%15
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Transforming The Portfolio With Disciplined M&A
Note: See references
Compelling 2022 Outlook Focused On Driving Value Creation
FY 2019 FY 2022
Global Revenue
$2.9B~$3.2B
~5%Core* CAGR
FY 2019 2020-2022
Cumulative
OperatingCash Flow
~$1.4B
$401M
~$1.4BCumulative
FY 2019 FY 2022
Adj. Earnings Per Share
$5.08
$6.80+
CAGR
12%+10%+Reported Ex.Divestiture
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© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Focusing On Durable Revenue Growth And Enhanced Profitability
*Core revenue excludes foreign currency, divestitures and non-strategic assets the company may exit, including Surgical Solutions international OEM business
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For “Sustainable Procurement”
Dave Thomas
Foundation Award recognizes Adoption
Benefits
American Heart Association Workplace
Health Achievement Award (Gold Level)
Diversity & Inclusion Award*
Silver Cradle Award recognizes Adoption
Benefits
The Corporate Board Initiative acknowledges
the advancement of women on Boards
Newsweek List of America’s Most
Responsible Companies
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
Promoting Excellence In The Workplace
External Recognition Validates Hillrom’s Cultural Impact
*Awarded in Mexico and France
22
Key Takeaways
✓ Connected Care vision delivers value and differentiation
✓ Compelling outlook builds on recent momentum; includes
durable, sustainable revenue and EPS growth
✓ Portfolio diversification creates stronger, more resilient
business across care settings
✓ Digital strategy, innovation and Emerging Market
penetration represent significant untapped opportunities
✓ Future M&A transactions additive to outlook
✓ Disciplined execution on strategic priorities will drive
enhanced value for patients, caregivers and shareholders
© 2020 Hill-Rom Services, Inc. ALL RIGHTS RESERVED. Confidential. APR36401. REV1
JANUARY 15, 2020
J.P. Morgan Healthcare Conference
John Groetelaars, President and CEO
References
• Slide 10: 1https://journal.chestnet.org. 2CDC. 3https://ahrq.gov/patient-safety/settings/hospital/resource/pressureulcer/tool/intro.html . 4 CMS/
Advisory Board. 5Advisory Board/CMS.
• Slide 11: 6Implementation of Instrument-Based Vision Screening for Preschool-Age Children in Primary Care (Published: July 2017 – PEDIATRICS). 7Comparing the Effectiveness of Telemedicine and Traditional Surveillance in Providing Diabetic Retinopathy Screening Examinations: A
Randomized Controlled Trial; Mansberger et al, Telemedicine and e-Health, Vol. 19 No. 12, Dec. 2013. 8https://trumpfmedical.com/it/solutions/robotic-or/trusystem-7000dv/. 9Hillrom customer (HC). Navicare© Patient Safety Customer Interview.
August 2017. Email results on file. 10The Impact of High-Frequency Chest Wall Oscillation on Healthcare Use in Patients with Neuromuscular
Diseases. Lechtzin N, Wolfe LF, Frick KD. Ann Am Thorac Soc. 2016 Jun;13(6):904-9. 11Dalal AA, Shah M, D’Souza AO, Rane P. Costs of inpatient
and emergency department care for chronic obstructive pulmonary disease in an elderly Medicare population. J Med Econ. 2010;13(4):591–
598. 17 Machlin S, Chowdhury S. Expenses and Characteristics of Physician Visits in Different Ambulatory CareSettings, 2008. Statistical Brief
#318. March 2011. Agency for Healthcare Research and Quality, Rockville, MD.
• Slide 13: 12Evaluation of an Incontinence Management System in the Critical Care Environment: A Case Series. Rachel Kennedy, MSN, RN,
Christine Slaughter, MSN, RN, CCRN-K, CCNS; Heather Raygoza, RN, BSN, CWOCN, CFCN and Peggle Brooks, RN, BSN, CWOCN, CFCN. 13Identifying Patient Deterioration Early Using Contact-Free Continuous Monitoring on an Inpatient Medical-Surgical Unit. Jan Linderberry MSM,
RN and Shelley Derr BSN, RN.
• Slide 19:14Breathe: Health care utilization and respiratory status following the addition of a portable non-invasive open ventilator to the
treatment regimen. Presented at CHEST, 2015.. 15Neil R. MacIntyre, MD. Clinical Chief, Pulmonary/Critical Care Division. Medical Director,
Respiratory Care Services. Professor of Medicine. Duke University.
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OVERVIEW