Mike Mahoney Chairman and Chief Executive Officer - Boston Scientific ...
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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 and
Section 21E of the Securities Exchange Act of 1934. 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. These forward-looking statements include, among other things,
statements regarding our business plans and product performance and impact, and the impact of the COVID-19
outbreak on the company's results of operations. If our underlying assumptions turn out to be incorrect, or if certain risks or
uncertainties materialize, actual results could vary 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 are 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.
2
Regulatory disclaimers
Product Regulatory Disclaimer
EXALT™ Model B Device under development. Not available for use or sale worldwide.
LithoVue™ Elite Device under development. Not available for use or sale worldwide.
ACURATE neo2™ self-expanding valve platform CE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.
Millipede Mitral Repair Technology Device under development. Not available for use or sale worldwide.
SAVAL™ drug-eluting below-the-knee stent U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.
EMPOWER™ Modular Pacing System U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.
POLARx™ single shot cryoablation balloon CE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.
STABLEPOINT™ force-sensing catheter CE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.
Vercise Genus™ DBS System CE Marked. U.S.: Caution: Investigational Device. Limited by Federal (or U.S.) law to investigational use only. Not available for sale.
3
Financial disclaimers
Market Estimates:
Unless noted otherwise, all references to market sizes, market share positions, and market growth rates are BSX internal estimates.
Non-GAAP Financial Measures:
This presentation contains non-GAAP measures (denoted with *) in talking about our company’s performance. The reconciliations of those non-GAAP measures to their most
comparable GAAP measures are contained within this document including appendices attached to the end of this presentation.
Revenue Growth:
All growth rates are operational unless otherwise noted. Operational net sales growth rates are non-GAAP measures that exclude the impact of foreign currency fluctuations.
Organic net sales growth rates are non-GAAP measures that exclude the impact of foreign currency fluctuations and net sales associated with our acquisitions of the American
Medical Systems male urology portfolio, EndoChoice Holdings, Inc., Symetis SA, NxThera, Inc., Claret Medical, Inc., Augmenix, Inc., Vertiflex, Inc. and BTG plc (BTG) for the periods for
which there were no prior period net sales. Organic net sales growth rates also excludes the impact of net sales associated with the divestitures of our global embolic microspheres
portfolio, a transaction entered into in connection with obtaining the antitrust clearances required to complete the BTG transaction, and our intrauterine health franchise for the
periods for which there were no comparable net sales.
Medical Devices:
We have three historical reportable segments comprised of Medical Surgical (MedSurg), Rhythm and Neuro, and Cardiovascular, which represent an aggregation of our operating
segments that generate revenues from the sale of medical devices (Medical Devices). As part of our acquisition of BTG on August 19, 2019, we acquired an Interventional Medicine
business, which is now included in our Peripheral Interventions operating segment's revenues from the date of acquisition.
Specialty Pharmaceuticals:
As part of our acquisition of BTG, we acquired a specialty pharmaceuticals business (Specialty Pharmaceuticals). Subsequent to acquisition, Specialty Pharmaceuticals is now a
stand-alone operating segment presented alongside our Medical Device reportable segments. Specialty Pharmaceuticals net sales are substantially U.S. based. Our chief operating
decision maker (CODM) reviews financial information of our globally managed Specialty Pharmaceuticals operating segment at the worldwide level without further disaggregation
into regional results. As such, Specialty Pharmaceuticals net sales are presented globally, and our Medical Devices reportable segments regional net sales results do not include
Specialty Pharmaceuticals. In Q4 2020, we signed a definitive agreement to sell Specialty Pharmaceuticals. The sale is expected to close in the first half of 2021, pending customary
closing conditions.
Emerging Markets:
We define Emerging Markets as the 20 countries that we believe have strong growth potential based on their economic conditions, healthcare sectors and our global capabilities.
Periodically, we assess our list of Emerging Markets, which is currently comprised of the following countries: Argentina, Brazil, Chile, China, Colombia, Czech Republic, India, Indonesia,
Malaysia, Mexico, Philippines, Poland, Russia, Saudi Arabia, Slovakia, South Africa, South Korea, Thailand, Turkey and Vietnam.
4
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 Diversity & Winning
Caring
Innovation Performance Collaboration Inclusion Spirit
5
Snapshot 2020
Global reported revenue ~$10B1
LACA
$0.3B
Urology &
Pelvic Health
$1.3B Interventional APAC
Cardiology $1.8B
$2.3B
Diverse
Continued
Endoscopy portfolio with
global
$1.8B increasing
expansion & US
exposure to
significant EM $5.5B
high growth Peripheral opportunity
markets Interventions EMEA
$0.2Bt $1.6B $2.1B
Neuromod
$0.8B EP Cardiac Rhythm
$0.3B Management
$1.7B $0.2Bt
6
tSpecialty Pharmaceuticals $0.2B. In Q4 2020, we signed a definitive agreement to sell Specialty Pharmaceuticals. The sale is expected to close in the first half of 2021, pending customary closing conditions.
High performance track record
Revenue Adjusted Operating Margin* Adjusted EPS*
Reported revenue, Y/Y operational* growth
Adj. operating margin* goal Adj. EPS* growth goal
Y/Y organic* growth rates
Organic* revenue growth goal +DD%
30%+
+6-8% Y/Y
$10.7B $1.58
$9.8B 26.1% $1.47
+11% 25.5% +13%3
$9.0B 25.0%
+8% 24.1% $1.26
$8.4B +11%2
+8% +7%
+7% $1.11
+12% +13%
+7%
+10% +20%
// // //
Goal ex- 2016 2017 2018 2019 Goal ex-
2016 2017 2018 2019 Long term 2016 2017 2018 2019
COVID COVID
Pre-COVID track record of growing organic* revenue faster than peer group,
driving OM expansion and double-digit adj EPS* growth
7
Growth goals ex-COVID represent comparisons between time periods in which results are not materially impacted by the COVID-19 pandemic.
Fourth quarter & full year 2020 results1
Revenue Organic* revenue growth
FY:20 FY:19 Q4:20 FY:20 Key Q4:20 Commentary
IC $2.3B 10% -23% -18%
• Total company -8.0% organic includes 370 bps ($106M) headwind related to
Watchman consignment reserves
PI $1.6B 8% 5% -3%
- Global sales impacted by increased COVID headwind throughout the quarter
• PI +5% driven by interventional oncology, drug-eluting portfolio & EKOS
CRM $1.7B 1% -6% -12%
- BTG Interventional Medicine +12% growth
• MedSurg return to growth driven by strong procedural trends & site of service
EP $0.3B 7% -2% -14%
- Endo: broad-based improvement across regions + Infection Prevention tailwind
NM $0.8B 7% -12% -16% - UroPH: led by Stone & BPH
• IC -23% includes headwind of (16%) related to Watchman consignment + China
tender reserves
Endo $1.8B 9% 1% -6%
- Watchman +18% growth excl. impact of transition to consignment
• Rhythm & Neuro impacted by increased COVID headwind throughout the quarter
UroPH $1.3B 8% 1% -7%
- New product launches offset by procedure cancellations in December
Totalt $9.9B 7% -8% -11%
tSpecialty
Pharmaceuticals $0.2B. In Q4 2020, we signed a definitive agreement to sell Specialty Pharmaceuticals. The sale is expected to close in the first half of 2021, pending customary closing conditions.
IC revenue decline includes (1600) bps due a sales return reserve related to both the transition to consignment for LAAC and price concessions related to China DES & balloon tenders in Q4:20, (720) bps FY:20. 8
Total company revenue decline includes (370) bps due to sales return reserve related to the transition to consignment for LAAC in Q4:20, (170) bps FY:20.
What to expect from BSX: 2021
• Recovery driven by compelling portfolio, new launches, and lessening COVID impact throughout 2021
• Continued execution of category leadership strategy & portfolio diversification into higher growth markets
• Multiple 2020 product approvals & reimbursement wins combine to drive growth in 2021+
• Building on healthcare digital adoption by accelerating and expanding capabilities
• A strong commitment to corporate social responsibility
• Significantly improving financial performance and shareholder value:
– Strong balance sheet well positioned for strategic capital deployment
– Ex-COVID, long term financial goals for 6-8% organic revenue growth* and margin expansion to drive
strong cash flow and double-digit adj EPS* growth
9
Growth goals ex-COVID represent comparisons between time periods in which results are not materially impacted by the COVID-19 pandemic.
Consistent portfolio diversification into
higher growth markets
BSX portfolio revenue mix: wide exposure to faster growth markets drives ex-COVID organic* growth +6-8%
High growth markets (>7% CAGR):
$11B ~35% IC (Structural Heart), PI (Arterial, Venous, IO)
RM (EP, ICM), NM (MIS Pain, DBS)
Endo (S/U scopes, ELS), UroPH (Prostate Health)
$8B ~25%
$7B ~15%
~10% Moderate growth markets (3-7% CAGR):
IC (Complex PCI)
~45% ~50% ~45% ~45% NM (SCS)
Endo (Core), UroPH (Core)
~45% ~35% ~30% ~20%
Low growth markets (Key growth drivers:
MedSurg
Endoscopy Urology & Pelvic Health
• EXALT™ D duodenoscope
Single-use • EXALT™ B bronchoscope • LithoVue Elite™ single-use
Scopes (H2:21E) Stone flexible ureteroscope (2021E)
• SpyGlass™ DS II cholangioscope Disease • Comprehensive device
portfolio
Pancreatico- • AXIOS™ transluminal stent
biliary • WallFlex™ biliary metal stent
• SpaceOAR™ hydrogel spacer
Prostate
• Rezūm™ MIS & Greenlight
Health XPS™ laser therapy
GI Cancer & • ORISE™ Gel & ProKnife
Bleeding • Resolution™ hemostasis clips
Prosthetic • AMS 700™ penile prosthesis
Infection • Scope accessories & repair Urology • AMS 800™ urinary control
system
Prevention • Compliance kits
11Key growth drivers:
Cardiovascular
Interventional Cardiology Peripheral Interventions
• ELUVIA™ DES
• Watchman FLX™ LAAC Arterial • Ranger™ DCB
Structural • ACURATE™ TAVR • SAVAL™ DES (BTK, 2022E)
Heart • SENTINEL™ embolic
protection
• Millipede mitral valve
repair (U.S. EFS 2021)
Interventional • TheraSphere
™ Y90
• ICEfx™ & HEATfx™ ablation
Oncology
• Next gen coils & microcatheters
• Broadest Complex PCI
portfolio
Core IC • AVVIGO™ PCI guidance • AngioJet™ thrombectomy
(FFR & IVUS) catheters
• Drug-eluting stents Venous
• EKOS™ 4.0 system
• VICI™ venous stent
12Key growth drivers:
Rhythm & Neuro
Rhythm Management Neuromodulation
• HeartLogic™ heart
Cardiac Rhythm failure diagnostic
• WaveWriter Alpha™ Spinal
Management • EMBLEM™ S-ICD with
Cord Stimulation
EMPOWER™ leadless Pain • Superion™ spacer for
pacer (FIH 2021)
moderate lumbar spinal
stenosis
• POLARx™ single-shot
cryoablation balloon
• STABLEPOINT™ force-
Electrophysiology sensing catheter
• RHYTHMIA HDx™
mapping system
• Vercise Genus™ Deep
Brain Brain Stimulation
• Expanded indications
Diagnostics • LUX-Dx™ insertable
cardiac monitor
13Enhanced capabilities:
Digital acceleration
Medical Education &
Customer Engagement Remote Case Support Mobile Ordering
Clinical Trials
• Digital marketing, patient • Enabling teleproctoring & • Introduced next generation • Offering direct, mobile
awareness, commercial model virtual medical education case support & virtual reality enabled ordering for ASCs &
evolution • Remote monitoring of clinical solutions combined with OBLs
trials technical expertise
FROzEN AF
14Financial strength & flexibility
• Tuck-in M&A remains #1 priority: Focused on high growth adjacent markets
• Active VC portfolio: ~$500M across 40 companies
• Opportunistic share repurchase: $535M in Q4:20 & new authorization for up to $1B
• Solid 2020 cash flow in COVID environment
• Strong liquidity: Minimal calls on cash with ~$1.7B on hand as of 12/31/20 + $2.75B revolver
• Leverage: Approaching gross debt-to-EBITDA ~2.5x YE2021
15Living our values
Transforming Care Investing in Our People Creating Value
Responsibly
Newsweek’s
~$1 billion 99%+ America’s Most
gender pay equity Responsible Companies
invested in R&D
~30 million Top 10%
globally recognized leader
patients served
for workplace inclusion
Advancing Possibilities Protecting the Environment
$85M+ 100%
philanthropic giving
Renewable Energy by 2024
$13M+ Carbon
COVID-19 Relief
Neutrality
15 years closing the in manufacturing and key
distribution sites by 2030 MIT Sloan Management
health disparity gap
Review/Glassdoor
16
Data as of year-end 2019, except COVID-19 relief and Close the Gap program as of 2020What to expect from BSX: 2021
• Recovery driven by compelling portfolio, new launches, and lessening COVID impact throughout 2021
• Continued execution of category leadership strategy & portfolio diversification into higher growth markets
• Multiple 2020 product approvals & reimbursement wins combine to drive growth in 2021+
• Building on healthcare digital adoption by accelerating and expanding capabilities
• A strong commitment to corporate social responsibility
• Significantly improving financial performance and shareholder value:
– Strong balance sheet well positioned for strategic capital deployment
– Ex-COVID, long term financial goals for 6-8% organic revenue growth* and margin expansion to drive
strong cash flow and double-digit adj EPS* growth
17
Growth goals ex-COVID represent comparisons between time periods in which results are not materially impacted by the COVID-19 pandemic.References and non-GAAP Disclosures
Acronym Reference Guide
BPH Benign Prostatic Hyperplasia IO Interventional Oncology
BTK Below-the-Knee LAAC Left Atrial Appendage Closure
CRM Cardiac Rhythm Management MIS Minimally Invasive Surgery
DBS Deep Brain Stimulation NM Neuromodulation
DCB Drug Coated Balloon PCI Percutaneous Coronary Intervention
DES Drug-Eluting Stent PE Pulmonary Embolism
Endo Endoscopy PI Peripheral Interventions
EP Electrophysiology RM Rhythm Management
GI Gastrointestinal SCS Spinal Cord Stimulation
IC Interventional Cardiology TAVR Transcatheter Aortic Valve Replacement
ICM Insertable Cardiac Monitor UroPH Urology & Pelvic Health
19References
*Non-GAAP measure; for reconciliations of non-GAAP financial measures to the most directly comparable GAAP figures, please refer to the schedules within
the Appendix of this document.
1Based on preliminary, unaudited sales results issued January 12, 2021
2Fullyear 2018 adjusted earnings per share was $1.47, which includes a $0.07 net tax benefit for the year. Excluding this net tax benefit of $0.07, our 2018
adjusted earnings per share grew 11%. Full year 2018 net tax benefit of $0.07 includes our second quarter $0.06 benefit from settling the IRS Stipulation of
Settled Issues for the 2001 through 2010 tax years, offset by a fourth quarter $0.05 charge for our tax reinvestment strategy. In addition, the net benefit
includes a $0.06 benefit in the fourth quarter for the settlement with the IRS of our 2011 through 2013 tax years.
32019adjusted EPS growth including the 2018 net tax benefit, as described above in Reference No. 2, was 8% and normalized for the 2018 net tax benefit
was 13%.
20Supplemental Non-GAAP Disclosures
Less: Impact of
Less: Impact of Recent
Foreign Currency Operational Acquisitions / Organic
FY 2020 Divisional Revenue Growth1(unaudited) compared to FY 2019 Reported Basis Fluctuations Basis Divestitures Basis
Endoscopy -6.0% 0.3% -6.3% 0.0% -6.3%
Urology & Pelvic Health -9.0% 0.0% 9.0% -1.7% -7.3%
MedSurg -7.3% 0.2% -7.5% -0.7% -6.7%
Cardiac Rhythm Management -12.1% 0.2% -12.4% 0.0% -12.4%
Electrophysiology -12.8% 0.8% -13.5% 0.0% -13.5%
Neuromodulation -12.8% 0.1% -13.0% 2.8% -15.7%
Rhythm and Neuro -12.4% 0.3% -12.7% 0.8% -13.4%
Interventional Cardiology -18.4% -0.1% -18.2% 0.0% -18.2%
Peripheral Interventions 13.3% 0.2% 13.1% 15.6% -2.5%
Cardiovascular -7.9% 0.0% -7.9% 5.2% -13.1%
Medical Devices -9.0% 0.1% -9.1% 2.1% -11.2%
Specialty Pharmaceuticals n/a n/a n/a n/a n/a
Net Sales -7.7% 0.1% -7.8% 3.5% -11.3%
Less: Impact of
Less: Impact of Recent
Foreign Currency Operational Acquisitions / Organic
1
Q4 2020 Divisional Revenue Growth (unaudited) compared to Q4 2019 Reported Basis Fluctuations Basis Divestitures Basis
Endoscopy 3.4% 1.9% 1.5% 0.0% 1.5%
Urology & Pelvic Health -0.8% 1.0% -1.8% -2.3% 0.6%
MedSurg 1.5% 1.5% 0.1% -1.0% 1.1%
Cardiac Rhythm Management -4.6% 1.8% -6.4% 0.0% -6.4%
Electrophysiology 1.1% 2.8% -1.8% 0.0% -1.8%
Neuromodulation -11.2% 0.8% -12.0% 0.0% -12.0%
Rhythm and Neuro -6.1% 1.6% -7.7% 0.0% -7.7%
Interventional Cardiology -21.9% 1.5% -23.4% 0.0% -23.4%
Peripheral Interventions 6.5% 1.7% 4.8% 0.0% 4.8%
Cardiovascular -12.0% 1.6% -13.5% 0.0% -13.5%
Medical Devices -6.1% 1.5% -7.7% -0.3% -7.4%
Specialty Pharmaceuticals -38.5% 0.3% -38.8% 0.0% -38.8%
Net Sales -6.8% 1.5% -8.3% -0.3% -8.0% 21Supplemental Non-GAAP Disclosures
Less: Impact of WATCHMANTM Revenue Growth Q4 2020 1
Less: Impact of Recent Revenue growth, as reported -55%
Foreign Currency Operational Acquisitions / Organic Less: Impact of foreign currency fluctuations 1%
FY 2019 Divisional Revenue Growth Reported Basis Fluctuations Basis Divestitures Basis Revenue growth, operational -56%
Endoscopy 7.5% -1.7% 9.2% 0.0% 9.2% Less: Impact of recent acquisitions / divestitures 0%
Urology & Pelvic Health 13.4% -1.3% 14.7% 6.3% 8.4% Revenue growth, organic -56%
MedSurg 10.0% -1.5% 11.5% 2.7% 8.8%
Cardiac Rhythm Management -0.6% -1.8% 1.2% 0.0% 1.2%
Less: Impact of consignment -74%
Electrophysiology 5.5% -2.0% 7.5% 0.0% 7.5%
Revenue growth, organic excluding consignment impact 18%
Neuromodulation 12.0% -1.1% 13.1% 6.3% 6.8%
Rhythm and Neuro 3.3% -1.6% 4.9% 1.6% 3.3%
Interventional Cardiology 8.7% -2.3% 11.0% 1.0% 10.0%
Peripheral Interventions 17.3% -1.8% 19.1% 11.3% 7.8%
Cardiovascular 11.4% -2.1% 13.5% 4.2% 9.3%
Medical Devices 8.5% -1.7% 10.2% 2.9% 7.3%
Specialty Pharmaceuticals n/a n/a n/a n/a n/a
Net Sales 9.3% -1.8% 11.1% 3.8% 7.3%
Revenue Growth 2020 1 2019 2018 2017 2016
Revenue growth, as reported -7.7% 9.3% 8.6% 7.9% 12%
Less: Impact of foreign currency fluctuations 0.1% -1.8% 0.6% 0.1% 0%
Operational Revenue Growth -7.8% 11.1% 8.0% 7.8% 12%
Less: Impact of recent acquisitions / divestitures 3.5% 3.8% 0.8% 1.2% 2%
Organic Revenue Growth -11.3% 7.3% 7.2% 6.6% 10%
Adjusted Operating Margin 2019 2018 2017 2016
Operating Margin, as reported 14.1% 15.3% 14.2% 5.3%
Less: Non-GAAP adjustments -12.0% -10.2% -10.8% -18.8%
Adjusted Operating Margin 26.1% 25.5% 25.0% 24.1%
22Supplemental Non-GAAP Disclosures
Earnings Per Diluted Share 2019 3 2018 2 2017 2016 2015
GAAP net income (loss) per share 3.33 $ 1.19 $ 0.08 $ 0.25 $ (0.18)
Amortization expense 0.44 0.37 0.35 0.35 0.33 (a)
Intangible asset impairment charges 0.07 0.02 - 0.01 0.01 (a)
Acquisition/divestiture-related net charges (credits) 0.48 - 0.01 0.09 0.17 (a)
Restructuring and restructuring-related net charges (credits) 0.05 0.05 0.05 0.04 0.05 (a)
Litigation-related net charges (credits) 0.05 0.06 0.12 0.37 0.52 (a)
Investment impairment charges - - 0.03 - - (a)
EU MDR implementation charges - - - - - (a)
Debt extinguishment net charges (credits) 0.05 - - - 0.02 (a)
Deferred tax expenses (benefits) Adjusted Operating Margin (2.91)
2019 2018 - 2017 2016 - - - (a)
Operating Margin, as reported 14.1% 15.3% 14.2% 5.3%
Discrete tax items Less: Non-GAAP adjustments 0.01
-12.0% -10.2% (0.23)-10.8% 0.62
-18.8% - (0.01) (a)
Pension termination charges Adjusted Operating Margin - 26.1% 25.5% - 25.0% 24.1%- - 0.02 (a)
Adjusted net income (loss) per share $ 1.58 $ 1.47 $ 1.26 $ 1.11 $ 0.93
Adjusted net income (loss) per share $ 1.58 $ 1.47
2
Less: Impact of 2018 net tax benefit 0.00 0.07
Adjusted net income (loss) per share, excluding 2018 net tax benefit $ 1.58 $ 1.40
Adjusted EPS growth from prior year 8% 17% 13% 20%
Adjusted EPS growth from prior year, excluding 2018 net tax benefit 13% 11%
(a) Assumes dilution of 21.5 million shares for the year ended December 31, 2015.
Adjusted operating margin, adjusted earnings per share (EPS) and related growth rates are non-GAAP measures that exclude the impacts of certain charges (credits)
which may include amortization expense, goodwill and intangible asset impairment charges, acquisition/divestiture-related net charges and credits, restructuring and
restructuring-related net charges and credits, litigation-related net charges and credits, investment impairment charges, pension termination charges, EU MDR
implementation charges, debt extinguishment net charges and credits, deferred tax expenses (benefits) and discrete tax items.
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