J.P. MORGAN HEALTHCARE CONFERENCE Robert Abernathy Chairman and CEO
OVERVIEW FORWARD-LOOKING INFORMATION Certain matters in this presentation and conference call, including our 2016 outlook, expectations and planning assumptions, and any estimates, projections, and statements relating to our business plans or objectives, constitute forward-looking statements and are based upon management’s expectations and beliefs concerning future events impacting the Company. These statements are subject to risks and uncertainties, including currency exchange risks, cost savings and reductions, raw material, energy, and other input costs, competition, market demand, economic condition, and legislative and regulatory actions. There can be no assurance that these future events will occur as anticipated or that the Company’s results will be a s estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them. For a more complete listing and description of other factors that could cause the Company’s future results to differ materially from those expressed in any forward- looking statements, see the Company’s most recent Form 10 -K and Quarterly Reports on Form 10-Q. NON-GAAP FINANCIAL MEASURES Management believes that non- GAAP financial measures enhance investors’ understanding and analysis of the company’s performance. As such, results and outlook have been adjusted to exclude certain items for relevant time periods as indicated in the non-GAAP reconciliations to the comparable GAAP financial measures included in this presentation posted on our website (www.halyardhealth.com/investors). J.P. Morgan Healthcare Conference 2
• DELIVERING our 2016 objectives • ADVANCING our transformation • LEVERAGING our growth opportunities • DRIVING our 2017 performance J.P. Morgan Healthcare Conference 3
DELIVERING OUR 2016 OBJECTIVES FUELING GROWTH 2016 PLAN • Medical Devices growing on plan • Completed CORPAK acquisition • S&IP performing in line with expectations • Increased R&D investment • Free cash flow greater than expected • Launched 11 new products J.P. Morgan Healthcare Conference 4
ADVANCING OUR TRANSFORMATION ON TARGET • Successful spin execution and focus on efficiency of stand-alone operations Position For Success • Accelerate innovation engine (spin through 2015) Fuel Growth Fuel Growth • Invest in growth initiatives • Invest in growth initiatives Fuel Growth Fuel Growth • Invest in growth initiatives • Invest in growth initiatives • Round out Medical Devices portfolio through • Round out Medical Devices portfolio through Pipeline Pipeline Pipeline Pipeline • Round out Medical Devices portfolio through strategic M&A • Round out Medical Devices portfolio through strategic M&A (2016 - 2017) (2016 - 2017) strategic M&A strategic M&A (2016 - 2017) (2016 - 2017) • Portfolio transitioned to high growth and high margin Medical Devices • Portfolio transitioned to high growth and high margin Medical Devices Long-Term Devices Focus Long-Term Devices Focus • Adjacency expansion in Pain Management, Digestive Health and Respiratory Health • Adjacency expansion in Pain Management, Digestive Health and Respiratory Health (2018 and beyond) (2018 and beyond) J.P. Morgan Healthcare Conference 5
ADVANCING OUR TRANSFORMATION PORTFOLIO 59% Share of Operating Medical Devices +22% 37% Profit from Medical sales mix up Devices up from 37% from 30% Period Q4 2014 to Q3 2016 Period Q4 2014 to Q3 2016 200 bps +4% YTD 2016 Adjusted Gross Margin Accelerating 2015 growth in expansion driven 2014 by portfolio shift Medical Devices Through Q3 2016 Period Q1 2015 to Q3 2016 J.P. Morgan Healthcare Conference 6
ADVANCING OUR TRANSFORMATION COMPANY Q3 2016 Medical Increasing product launches Devices and pipeline value R&D up 11 (2016) Q4 2014 50% 6 (2015) 2 (2014) $139M Free Cash Flow helps fund growth investments LTM Through Q3 2016 J.P. Morgan Healthcare Conference 7
HALYARD TRANSFORMATION J.P. Morgan Healthcare Conference 8
LEVERAGING OUR GROWTH OPPORTUNITIES In a $6B+ Addressable Market ¹ Leading Market Share Positions… 38% 14% 38% Surgical Pain Interventional Pain Digestive Health Respiratory Health ¹ Estimated global addressable market size based on industry data and internal market estimates. J.P. Morgan Healthcare Conference 9
DRIVING SALES GROWTH Innovation Market Strategic through R&D Adoption M&A J.P. Morgan Healthcare Conference 10
DRIVING GROWTH THROUGH INNOVATION INCREASING R&D INVESTMENT REBALANCING BUILDING LAUNCHING SPEND TO FUND INNOVATION PAIN CENTER TRANSFORMATIVE CAPABILITY OF EXCELLENCE R&D • Recruited new leadership team • Allocation to transformative • Focusing on diagnosing and and talent in neuroscience projects increased to 50% in 2017 treating pain through non-opioid from 19% in 2015 therapies • Increased Medical Devices • Sustaining R&D to protect leading • Leveraging expertise to develop spending by 50% market positions new technologies • Launched 10 products in 2016, up • Building partnerships with from 2 in 2014 universities and researchers J.P. Morgan Healthcare Conference 11
DRIVING GROWTH BY ACCELERATING MARKET ADOPTION FOCUSED ON COST, QUALITY & OUTCOMES REDUCING ENGAGING GENERATING NARCOTIC PATIENTS CLINCAL EVIDENCE DEPENDENCY • Significant opportunity to reduce • Launched ON-Q track, which • Investing in clinical outcomes data the systemic costs linked to emphasizes the patient experience that validates Halyard therapies opioid-based pain relievers and outcomes • Knee osteoarthritis abstract data • Bundled payment provides • Advertising direct to consumer for presented at ASRA and awarded opportunity to raise awareness of COOLIEF to build awareness “Best in Conference;” evidence the economic and clinical supports future growth and advantages adoption of COOLIEF • Leveraging our more than 100 ON-Q clinical studies J.P. Morgan Healthcare Conference 12
DRIVING GROWTH THROUGH STRATEGIC M&A EXECUTING EXPLORING EXHIBITING BOLT-ON EARLY STAGE CAPACITY TO ACQUISITIONS INVESTMENTS EXECUTE • Demonstrating ability to acquire • Partnering with leading research • Established network of advisors and integrate institutions and clinical experts on to enhance target identification new therapies • Realizing and accelerating • Leverage capacity of up to $400 • Evaluating MedTech investments synergies validating scalability of million existing portfolio and joint venture opportunities to fuel our growth • Enhancing our enteral feeding portfolio with clinically preferred products J.P. Morgan Healthcare Conference 13
SURGICAL & INFECTION PREVENTION MARKET LEADING SHARES AND DIVERSIFIED PORTFOLIO CLEARLY DEFINED EXECUTING LEADING MARKET STRATEGY FOCUSED PLAN INNOVATION • Maintaining market share • Realizing annual manufacturing • Investing in continuous cost savings programs product evolution • Maximizing cash flow • Employing specialized, dedicated • Introducing value-based • Leveraging strong brands sales force alternatives J.P. Morgan Healthcare Conference 14
COMPANY TRANSFORMATION Driving Enhancing Tax Planning Efficiency in IT Supply Chain J.P. Morgan Healthcare Conference 15
TRANSFORMING THROUGH IT COST STRUCTURE IT COST TRANSFORMATION PROGRESS TO DATE • Migrated to third-party hosting • Improve data quality and utilization through data harmonization • Reduced IT costs as a percentage of • Consolidate ERP systems sales • Planning for ERP migration • Enhance back office efficiencies J.P. Morgan Healthcare Conference 16 16
TRANSFORMING THROUGH TAX PLANNING TAX OPTIMIZATION PLAN PROGRESS TO DATE • Reduced rate to 34% from 38% • Long-range tax planning • Maximized R&D tax credit • Evaluating potential legislative changes J.P. Morgan Healthcare Conference 17 17
TRANSFORMING THROUGH SUPPLY CHAIN DRIVING EFFICIENCY PROGRESS TO DATE • Collecting cash faster than pre-spin • Refining inventory management through SKU rationalization • Maintaining pre-spin payment terms • Enhancing planning capabilities • Completed product rebranding J.P. Morgan Healthcare Conference 18 18
CULTURAL TRANSFORMATION Healthcare Thought Innovation Focus Bold Decision Making Leadership J.P. Morgan Healthcare Conference 19
DRIVING OUR 2017 PERFORMANCE FUELING GROWTH 2017 PLAN • Accelerate device growth • Continue acquisition strategy • Deliver S&IP plan • Increase R&D investment • Execute product launches • Execute cost transformation • Generate strong cash flow J.P. Morgan Healthcare Conference 20
THANK YOU
APPENDICES J.P. Morgan Healthcare Conference 22
Recommend
More recommend
