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Piper Jaffray Conference Presentation
December 5, 2019
Presentation of Financial Information & Forward-Looking Statements
Historical financial and operating data in this presentation reflect the consolidated results of Integer for the periodsindicated.
This presentation includes financial information prepared in accordance with accounting principles generally accepted inthe United States, or GAAP, as well as other financial measures referred to as non-GAAP. The non-GAAP financialmeasures in this presentation, which include Adjusted Net Income, Adjusted Diluted EPS, Earnings Before Interest TaxesDepreciation and Amortization (EBITDA), Adjusted EBITDA, and organic growth rates should be considered in addition to,but not as substitutes for, the information prepared in accordance with GAAP. For reconciliations of these non-GAAPfinancial measures to the most comparable GAAP measures, please refer to the appendix to this presentation and theearnings release associated with this quarterly period which can be found in the investor relations section of our corporatewebsite (investor.integer.net).
Statements made in this presentation whether written or oral may be “forward-looking statements” within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21E of Securities Exchange Act of 1934, asamended, and involve a number of risks and uncertainties. These statements can be identified by terminology such as“may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or“continue” or “variations” or the negative of these terms or other comparable terminology. These statements are based onthe company’s current expectations and speak only as of December 5, 2019. The Company’s actual results could differmaterially from those stated or implied by such forward-looking statements. The Company assumes no obligation toupdate forward-looking information, including information in this presentation, to reflect changed assumptions, theoccurrence of unanticipated events or changes in future operating results, financial conditions or prospects.
2 ITGR: Investor Presentation / November 2019
Cardiovascular / Structural Heart
Peripheral Vascular
Neurovascular
Cardio & Vascular
48%
Cardiac Rhythm Management &
Neuromodulation37%
AS&O & Portable Medical
11%Electrochem
5%
Military
Tachycardia
SCS / Neurostimulation
Adv Surgery
Orthopedics
Revenue by Markets Served - $1.26 billion(1)
Steerable Sheaths
Catheters & Sheaths
Introducers
Guidewires, Stylets & Accessories
Finished Device
Leads & Lead Components, Adaptors & Assemblies
Orthopedic Implants
Electrosurgical Accessories
Battery Cells Battery Packs
Core Battery Pack Assemblies
Li-Ion BatteryPacks
Batteries Capacitors
Feedthroughs
Enclosures
Stents / Valves Combined DevicesPortable Medical
BradycardiaUrology
Oncology
Electrophysiology
Vascular Access
Markets
Products
Markets
Products
Markets
ProductsMarkets
EnergyEnvironmental
Products
3 ITGR: Investor Presentation / November 2019 - (1) midpoint of 2019 guidance range
Portfolio Strategy Operational Strategy:Strategic ImperativesHow we win
in the markets we serve How we achieve excellence in everything we do
Focused Strategy to Drive Long-term Growth
Cardio & Vascular
Neuromodulation
Electrochem
Portable Medical
Invest to Grow
Protect & Preserve
Cardiac Rhythm Management
4 ITGR: Investor Presentation / November 2019
Customers
CultureCosts
Portfolio StrategyProduct Category Leaders
Operational StrategyStrategic Imperative Leaders
Joel BeckerPresident, CRM&N
Kirk ThorCHRO
Joel BeckerPresident, Cardiac Rhythm Management & Neuromodulation
Payman KhalesPresident, Cardio & Vascular
Carter HoughtonPresident, Electrochem & Portable Medical
Jen BoltSVP, Global Ops
Joe FlanaganEVP, Quality
Manufacturing Excellence
Business Process Excellence
Performance ExcellenceLeadership Capability
Sales Force Excellence
Market Focused Innovation
Payman KhalesPresident, C&V
Executive Alignment to Drive Our Strategy
Product Line Strategy and Growth TeamsInteger’s Sustainable Process to Drive Growth
Product Line
Strategies
Integer’s Product Line Strategy Process is how we develop winning strategies for Product Lines in our portfolio. Product Line Strategies include standard processes, tools and governance that drive our critical strategic decisions.
Growth TeamsCross-functional teams in place - accountable for developing product line growth strategies in targeted markets
Inputs Planning Execution
Patient Needs / Clinical Trends
Macro Technology Trends
Regulatory Trends
Emerging Markets Trends
Consolidation Trends
Manufacturing Trends
Capability Prioritization for Target Markets
Product Roadmap
Technology & Capability Roadmap
Sales Targeting & Account Management
Manufacturing Plan
Program Management for Development & Operations
Clear Functional Accountability
Sales Execution
KPIs and Relevant Metrics
Standard Processes & Business System Improvements
Continually Evolve Strategy in Order to Achieve Sustainable Revenue & Profit Growth
6 ITGR: Investor Presentation / November 2019
Manufacturing Excellence: Business Optimization and Margin Expansion
Integer Production Systems
Lean Diagnosis
KPI and DashboardStandardization
Continuous Improvement Culture
Status
• Framework and detailed system elements of our Integer manufacturing processes
• Defined & scoped 16 elements that comprise the IPS
• IPS element tools, templates and resources in process
• Comprehensive diagnosis and current-state mapping
• Prioritized and aligned site transformation plans
• All 15 facilities have completed their initial lean diagnosis
• Improvement actions underway • Learnings advancing to addition
value streams within sites
• Performance metrics with clear definition and reporting
• Safety, Quality, Delivery, Cost, People
• All site-level key process indicators defined
• Leadership dashboard developed and implemented
• Clear training and expectations of leaders and all associates
• Organizational design aligned to optimized operations.
• Site leadership lean training complete for all sites
• Organizational structure optimization in process
7 ITGR: Investor Presentation / September 2019
2019 Full-Year Outlook
Adjusted EPS
$1,213$3.80
$1,253 - $1,268 $4.55 - $4.65
($ in millions except per share amounts)
Growth % 3% - 4.5% 20% - 22%
Adjusted Sales
$259
$282 - $286
9% - 10%
Adjusted EBITDA
$1,260 - $1,280 $275 - $283 $4.05 - $4.25Original Guidance
8 ITGR: Investor Presentation / November 2019
Debt Payments
(1) Free Cash Flow defined as Cash Flow from Operations less Capital Expenditures, net of proceeds from sale of property, plant, and equipment(2) Leverage calculated as total principal amount of debt outstanding less Cash and Cash Equivalents divided by Trailing 4 Quarter Adjusted EBITDA
Cash Flow From Ops Free Cash Flow(1) Leverage(2)
2019 Cash Flow Outlook($ in millions)
$548
$160 - $170$110 - $120
$105 - $115
$67 - $77
Target2.5x - 3.5x
Divestiture ProceedsAccelerated Repayment Required Repayment
$700
$160 - $170 $110 - $120 $105 - $115 2.5x - 3.5xOriginalGuidance
No change, despite
$15 million acquisition
~2.9x
Disciplined capital deployment
ü Continued EBITDA growth
ü Increased free cash flow
ü Capacity for “bolt-on” acquisitions
ü Recently amended credit facility reducing interest expense
Leverage framework
Significant deleveraging6.1x
5.6x
2016
3.5x
2017 2018
~2.5 - 3.5x
Debt x EBITDA
Leverage
Balanced & Disciplined Capital Allocation
10
Y/E19 Guidance
2.9x
ITGR: Investor Presentation / November 2019
2021
Market + 2%
Revenue Growth versus Prior Year:
(2)%(4)%
2015 2016
5%7%
2017 2018
Integer’s Journey – Executing Long-term Growth Strategy
Disruption Stabilizing & Building Sustained Outperformance
2015 2016 2017 2018 Strategic Objectives
Executing Strategy
3% - 4.5%
2019 Guidance
• Market growth• ~1x revenue growth
• 6x à 3.5x
• New leadership team• Operational stabilization• Clear strategy
- Portfolio change
- Multi-year plans
DeclinedDeclined
>6x
• Integrated $1.7B Lake Region acquisition
• Spun off Nuvectra
• Challenging customer relationships
• Market growth, ex Nuvectra• 2x revenue growth
• Debt leverage 2.5x – 3.5x
• Product line strategy
• Operational Strategic Imperatives
• Executing bolt-on M&A• Disciplined capital
deployment
• 200bps above market• At least 2x revenue growth
• Debt 2.5x – 3.5x
“Excellence in everything we do”
11ITGR: Investor Presentation / November 2019
Contact Information
Tony BorowiczSVP, Strategy, Corporate Development & Investor Relations
www.integer.net
(O) 716.759.5809
12ITGR: Investor Presentation / November 2019