Bernstein’s 34 th Annual Strategic Decisions Conference Mike Mahoney Chairman and Chief Executive Officer
Safe Harbor for Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward- looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “estimate,” “intend” and similar words. These forward -looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could differ materially from the expectations and projections expressed or implied by our forward-looking statements. Factors that may cause such differences can be found in our most recent Form 10-K and Forms 10-Q filed or to be filed with the Securities and Exchange Commission under the headings “Risk Factors” and “Safe Harbor for Forward - Looking Statements.” Accordingly, you ar e cautioned not to place undue reliance on any of our forward-looking statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which they may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. Non-GAAP Measures: This document contains non- GAAP measures (denoted with *) in talking about our company’s performance. The reconciliations of tho se non-GAAP measures to their most comparable GAAP measures are contained within this document including appendices attached to the end of this presentation. Financial Disclaimers: Operational growth rates are non-GAAP measures that exclude the impact of foreign currency fluctuations. Organic growth rates are non- GAAP measures that exclude the impact of changes in foreign currency exchange rates and the sales from significant acquisitions (Symetis SA, the American Medical Systems male urology portfolio and EndoChoice Holdings, Inc.) in the relevant periods. We define Emerging Markets as including certain countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities. Currently, we have 20 countries in our definition of Emerging Markets. Market Estimates: Unless noted otherwise, all references to market sizes, market share positions, and market growth rates are BSX internal estimates. 2
Regulatory Disclaimers Product Regulatory Disclaimer Implantable Cardiac Monitor Device under development. Not available for use or sale worldwide. EMPOWER ™ Leadless Pacer Device under development. Not available for use or sale worldwide. Apama RF Balloon Catheter Device under development. Not available for use or sale worldwide. DrectSense ™ Technology Device under development. Not available for use or sale worldwide. CE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available Ranger ™ Drug-Coated Balloon for sale. Drug Eluting Stent – Below-the-knee indication Device under development. Not available for use or sale worldwide. CE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available Eluvia ™ Drug eluting self-expanding SFA stent for sale. Lotus Edge ™ U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale. CE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available ACURATE ™ Self Expanding Valve Platform for sale. WATCHMAN ™ FLX Pending CE Mark. Not available for use or sale in the U.S. 3
Our Mission and Values Boston Scientific is dedicated to transforming lives through innovative medical solutions that improve the health of patients around the world. Meaningful High Global Caring Diversity Winning Spirit Innovation Performance Collaboration 4
What to expect from BSX 1. Living BSX values Transforming patients’ lives through meaningful innovation • and a “WINNING SPIRIT” 2. Driving category leadership and expanding globally Gaining share globally: Portfolio innovation & compelling • economic value drivers Emerging markets: Building scale & new capabilities to • increase patient access 3. Enhancing long term outlook: entering into multiple large & high growth markets • Diversifying into large high-growth markets with differentiated portfolio & capabilities Multiple launches into $16B of new market opportunities • 4. Consistently delivering revenue and EPS growth in top tier of peer group 2015-2017: 3 year avg. organic revenue* growth +7% and • EPS CAGR +14.5% 2018E-2020E: 3 year organic revenue* CAGR +5-8% and EPS • CAGR +DD 5. Building shareholder value with disciplined capital allocation strategy: more to come • Strong free cash flow* generation: estimated $6.3B+ cumulative in years 2018-2020 Rigorous and balanced approach to M&A • 5
Boston Scientific At-A-Glance 2017 Revenue and Operational Growth*: (Total company: $9.0B, 8%; Organic Growth* 7%) Interventional Endoscopy Cardiology $2.4B, +6% $1.6B, +12% Structural Heart Urology & Pelvic Health $275M+ $1.1B, +12% Peripheral Interventions Neuromodulation $1.1B, +7% $0.6B, +14% Rhythm Management Electrophysiology CRM $1.9B, +2% $0.3B, +14% 6
High Performance Culture and Track Record Adjusted Operating Revenue Adjusted EPS* Margin* Reported Revenue, Y/Y Operational* growth $1.26 Y/Y Organic* growth rates 25.0% 24.1% +13% $9.0 $1.11 +8% 22.3% $8.4 +20% +7% +12% 20.2% $0.93 $7.5 $7.4 +10% 18.9% +11% $0.84 $7.1 +8% +6% +15% +2% $0.73 +5% +4% +11% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Consistent double digit adj. Sales growth consistently > mkt Delivering on margin EPS* growth: 14.5% CAGR w/ avg. 7% organic* growth expansion goals ’15 - ’17 ’15 - ’17E 7
Diversified and Durable Growth Profile Estimated Market Growth Rates High Growth Mkt (10%+ CAGR): SCS, TAVR, LAAC, EP, DBS, PI Drug Eluting, ICM Moderate Growth Mkt (4 - 9% CAGR): Endo, UroPH, PI (ex DES & DCB), Int. Oncology, IC (ex. SH, DES) Low Growth Mkt (0 - 3% CAGR): Pacers, Defibrillators, DES 2012 Revenue Mix 2017 Revenue Mix 2020E Revenue Mix $7.2B $9.0B High Growth High Low Low Low 7% High Growth Growth Growth Growth Growth 35% 25% 25% 46% 15% Moderate Moderate Moderate Growth Growth Growth 47% 50% 50% 8
Strong Product Pipeline Supports Long Range Plan Growth Targets All launches are WW, unless otherwise noted 2018E 2019E 2020E / 2021E Coronary Therapies Coronary Therapies Coronary Therapies Synergy TM DES line extensions Synergy TM DES line extensions 5 launches in Complex PCI • • • Multiple launches in Complex PCI Structural Heart • Structural Heart ACURATE TM Aortic Valve System – OUS WATCHMAN FLX TM LAAC Device – U.S. Structural Heart • • WATCHMAN FLX TM LAAC Device – EU ACURATE neo2 TM Valve System – Expansion • • WATCHMAN TM LAAC Device – Japan ACURATE neo2 TM Aortic Valve System – EU • • U.S./Japan ACURATE TM Valve System – Int’l ACURATE TM Valve System – size matrix PI • • expansion expansion • 3 launches in Arterial and Venous portfolio LOTUS Edge TM Valve System** – U.S. & LOTUS Edge TM Valve** size matrix expansion • CRM/EP • EU Resonate TM CRT-D w/ HeartLogic TM HF Alert Peripheral Interventions • Ranger TM SFA DCB – U.S. Rhythmia HDx TM Mapping System w/ Peripheral Interventions • • Eluvia TM SFA DES - U.S. • LUMIPOINT TM SAVAL TM Drug Eluting Stent BTK • DirectSense TM Rx Catheter – EU/U.S. Interventional Oncology Embolic Coils • CRM/EP • CRM/EP Neuromodulation Leadless Pacing/modular CRM – EU • ICM Monitoring & Dx • Spectra WaveWriter TM SCS System Force Sensing Catheter – U.S. • • • Force Sensing Catheter – EU Vercise TM DBS system – U.S. • Neuromodulation Apama RF PVI Balloon – EU • Endoscopy SCS & DBS next gen – U.S./EU • Neuromodulation New launches in Infection Prevention Endo • Expanded DBS platform • (valves, kits) EUS portfolio & indication expansion – • Endo SpyGlass TM DS II Visualization System & U.S./EU • SpyGlass TM Visualization System - next • cholangioscopy tools • Pulmonary diagnostics gen Orise TM Endoluminal Surgery portfolio Axios TM stent expanded Indications – U.S. • • New launches in Infection Prevention • Axios TM Transluminal Stent – OUS expansion • Urology/Pelvic Health New launches in Biliary • Urology/Pelvic Health Multiple launches in Stone • Urology/Pelvic Health 4 launches in Stone • Multiple launches in Men’s Health LithoVue TM Ureteroscope next gen • • • Next gen Greenlight fiber for BPH 5 additional launches in Stone • 9 **Intend to launch Lotus in the U.S. & EU in 2019 pending final testing & regulatory approvals
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