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Orthofix International N.V. NASDAQ:OFIX Brad Mason - President & CEO Doug Rice – CFO June 4, 2015

Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

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Page 1: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Orthofix International N.V. NASDAQ:OFIX

Brad Mason - President & CEO

Doug Rice – CFO

June 4, 2015

Page 2: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Except for historical information contained herein, the statements made in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward looking statements are based on our beliefs and expectations as of June 4, 2015, and we do not undertake any obligation to revise or update such forward looking statements. Certain factors may cause actual results to differ materially from those contained in the forward looking statements, including those risks detailed from time to time in the Company’s reports on file at the Securities and Exchange Commission.

Safe Harbor Statement

2

Page 3: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Orthofix may use certain non-GAAP financial measures in its presentations. Orthofix may use non-GAAP financial measures as supplemental measures of performance and believes these measures can provide useful information to investors in evaluating our operations, period over period. However, non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for Orthofix’s financial results prepared in accordance with GAAP. In addition, investors should note that any non-GAAP financial measures Orthofix uses may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. Investors can find reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings press releases.

Use of Non-GAAP Measures

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Page 4: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Culture of Integrity and Performance

4

Page 5: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Diversified business focused on bone fusion • Market leading products

• Global distribution footprint

• Investing in core technologies

• Infrastructure improvement underway

• Focus on long-term profitable growth

Investment Highlights

5

Page 6: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Orthofix – A Bone Fusion Company

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Page 7: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Our Strategic Business Units

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Page 8: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Pulsed Electromagnetic Field technology (PEMF) • PMA Class III approved • Market leading spine and cervical products • Orthofix Cervical-Stim® is only FDA approved device for cervical spine • Physio-Stim® for long-bone healing • Products primarily sold in the U.S.

BioStim Market & Products

8

Market Size: $500 M Market Share: 32% Market Position: #1 Annual Market Growth Rate: 0% - 2%

* Internal Estimates

*

Page 9: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Invest in research: • Evidence based

• Cost effectiveness • Basic science • New indications for our stimulation technology • Restructure our Physio-Stim® distribution model in the U.S. • Expand our distribution coverage for Spinal-Stim® and Cervical-Stim®

• Leverage our core competencies in PEMF – eNeura® purchase option

BioStim Strategy

Spinal-Stim®

Cervical-Stim®

Physio-Stim®

9

Page 10: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Biologics Market & Products

• Human cellular and tissue-based business • Long-term relationship with Musculoskeletal Transplant Foundation (MTF) • Trinity® stem cell tissues are market leader products • Launched new generation tissue form Trinity® ELITE™ in June 2013 • Products primarily sold in the U.S.

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Market Size: $1.74 B Market Share: 5% Market Position: #5 Annual Market Growth Rate: 3% - 5%

• U.S Bone Replacement Market, SmartTRAK™

*

Page 11: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Continue to leverage the market acceptance of Trinity® ELITE™

• Expand our distribution coverage beyond our spine and extremity fixation sales channels into other orthopedic markets • Increase our feet on the street into our existing markets • Accelerate new tissue development projects with MTF

Biologics Strategy

Trinity® ELITE™ Trinity Evolution®

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Page 12: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Extremity Fixation Market & Products

• Fracture repair, deformity correction and bone reconstruction • External and internal fixation devices • Ring fixation, pin-to-bar, plates, screws, nails • Best-in-class products • 80% of the revenue from outside of the U.S.

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Market Size: $800 M Market Share: 10% Market Position: #5 Annual Market Growth Rate: 2% - 4%

*

* Internal Estimates

Page 13: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Leverage our initial success with the TrueLok Hex and Galaxy product lines • Reorganize our U.S. and Brazil commercial strategies under new leadership • Increase penetration in existing world markets and expand into additional high potential countries • Develop and acquire premium products for temporary fixation, deformity correction and pediatrics

Extremity Fixation Strategy

Contours VPS® 3 TrueLok Hex™ Guided Growth™

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Page 14: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Spine Fixation Market & Products

• Implants for spine surgeries • Degenerative, MIS and deformity • Cervical, interbody and thoracolumbar • Anterior, posterior and lateral approaches • 85% of revenue from U.S.

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Market Size: $8.2 B Market Share: 1% Market Position: #9 Annual Market Growth Rate: 1% - 3%

* Internal Estimates

*

Page 15: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Expand U.S. sales force by 50% in the next 18 months • Double the number of regional sales VP’s and focus on field-based training and education - adding training specialists in each region • Achieve higher gross margins through pricing controls, new product introductions, improved instrument set utilization and better inventory management • Improve our new product development productivity and leverage our recent product introductions

Spine Fixation Strategy

LONESTAR™ CSA CONSTRUX® Mini PTC™ Centurion™ POCT

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Page 16: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Optimize sales channels

Invest in core technologies

Improve infrastructure

Establish financial predictability

2015 Key Corporate Objectives

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Page 17: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

ORTHOFIX SERVES OVER 65 COUNTRIES WORLDWIDE U.S. • ITALY • BRAZIL

GERMANY • FRANCE • U.K. • PUERTO RICO • AUSTRALIA

Global Footprint

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Page 18: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Streamlining new product development processes in fixation businesses

• Increasing pre-clinical and clinical research in our PEMF technologies to find new therapeutic indications

• Recently received U.S. FDA approval for two Investigational

Device Exemption clinical trials - odontoid fracture and knee osteoarthritis

• Accelerating our investments with MTF to develop more novel tissue forms for Orthofix to market

• We remain vigilant in finding strategic product tuck-in acquisitions

and licensing opportunities to complement our existing products

Investing in Core Technologies

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Page 19: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Legal entity and tax structure simplification

• Information technology (Oracle ERP re-implementation)

• Finance, internal controls and reporting

• Supply chain

• Order to cash

2014 – 2017 total investment of ~ $28 million ~ 50% capitalized ~ $18 million total spend in 2015

Objective: To achieve more cost effective and efficient business processes and controls – worldwide

Infrastructure Improvement - Project Bluecore

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Page 20: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Brad Niemann President, BioStim

Bob Goodwin President, Biologics

Davide Bianchi President, Extremity Fixation

Jim Ryaby, PhD Chief Scientific Officer

Brad Mason President and Chief Executive Officer

Leadership Team

Mike Finegan Chief Strategy Officer

Jeff Schumm Chief Administrative Officer General Counsel

Mark Atkinson Chief People Officer

Doug Rice Chief Financial Officer

Jill Mason Chief Compliance Officer

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Page 21: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Consolidated Net Sales and Adjusted EBITDA Margin

21

440

398 402

385 - 390

402 - 407

22.5%

14.1%

16.3%

14% - 16%

10%

15%

20%

25%

200

250

300

350

400

450

500

2012 2013 2014 2015

Adj.

EBIT

DA %

$ M

Sales as Reported Revenue CC Impact ADJ EBITDA %

(Est.)

Page 22: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Balance Sheet Summary – March 31, 2015

Assets

Cash 57.0 Accounts Receivable 58.5 Inventory 56.7 Other Assets 214.0

Total Assets 386.2

Liabilities

Current Liabilities 69.4 Long-Term Debt 0.0 Other Long-Term Liabilities 26.3

Total Liabilities 95.7

Shareholder Equity

Shareholder Equity 290.5

Total Liabilities and Shareholder Equity 386.2

($ in Millions)

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Page 23: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Capital deployment focus on Total Shareholder Return • Continue to increase cash generation through improved AR & inventory management processes • Invest in research and development in our core technology areas • Upgrade our infrastructure to achieve better efficiencies and controls • Acquire or license tuck-in products and technologies that support or

augment our existing businesses • Utilize our available capital to increase shareholder value, including

stock repurchases as prudent

Capital Management Strategy

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Page 24: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

• Diversified business focused on bone fusion • Market leading products

• Global distribution footprint

• Investing in core technologies

• Infrastructure improvement underway

• Focus on long-term profitable growth

Investment Highlights

24

Page 25: Orthofix International N.V. - Jefferies Group v9.pdf · in this presentation constitute ‘forward looking statements’ that involve certain risks and uncertainties. These forward

Thank you for your

Participation

OFIX Orthofix.com

Investor Relations – Mark Quick

[email protected]

COPYRIGHT ORTHOFIX INC 2015 5.25.15 v8