Jefferies Healthcare Conference - Boston Scientific/media/... · 8 Boston Scientific – Jefferies Healthcare Conference, June 7, 2016 ----- Estimated market* ----- Business 2015

Jefferies Healthcare Conference June 7, 2016

2 Boston Scientific – Jefferies Healthcare Conference, June 7, 2016

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. 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 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.


For reconciliations of non-GAAP financial measures used in these presentations to the most

directly comparable GAAP figures, please refer to the Investor Relations section of our website at

www.bostonscientific.com. Footnotes referenced in this presentation can be found on slide 14.

Disclaimers

http://www.bostonscientific.com/


BSX: What to expect from us

Consistently delivering on and exceeding financial goals1,2

• Strong culture fostering innovation and a “WINNING SPIRIT”

• 2015: 5% organic growth, +210bps adj. OM, 23% adj. EPS growth ex FX

• Q1:16: 8% organic growth, +260bps adj. OM, 41% adj. EPS growth ex FX

Transforming patients’ lives and leading in large global markets

• Entering faster growth segments, driving category leadership

• Building emerging markets scale and capabilities

Launching innovative new product cycle in 2016

• Driving consistent organic revenue growth with a long runway

Leading globally: More to come in 2017-2018 and beyond

• Launching into large, high growth markets with meaningful innovation

• Creating value: MSD rev. growth + adj. OM expansion = DD adj. EPS growth ex FX

See slide 14 for footnotes


Interventional

Cardiology

Neuromodulation

Endoscopy

Urology and

Pelvic Health

Rhythm Management

CRM, Heart Failure Management, Electrophysiology

$2.0B, +7%

$501M, +8%

$693M, +36%

CRM $1.8B, +1% EP $233M, +9%

Boston Scientific at-a-glance

$904M, +13%

$1.3B, +6%

$100M+

Peripheral

Interventions

2015 reported revenue, constant currency Y/Y growth

Structural Heart



Strong execution: Performance since 2012

Operational Revenue Growth1,3

Adj. Operating Margin2 Adj. EPS Growth2

Sales growth acceleration ~500 bps adj. OM

expansion

Double-digit adj. EPS

growth ex FX

17.8%

18.9%

20.2%

22.3%

2012 2013 2014 2015

11%

15%

2012 2013 2014 2015

$7.4B

-3%

5%

2012 2013 2014 2015

11%

4%

Excludes foreign exchange impact

(~$0.10 in 2015)

Includes foreign exchange impact

Operational revenue growth

Organic revenue growth

-2%

8%

6%

$7.4B

2%

$7.1B

$7.2B

**Adjusted for estimated impact of Medical Device Tax

(~100bps), based on actual 2013 impact

**


23%


STRENGTHEN

Category

Leadership

Strategic imperatives align execution

A preferred

leader & gaining

share in large

global segments

New commercial

capabilities to

lead in dynamic

markets

Adjusted

operating margin

target of 25%+

by 2017

Grow emerging

markets +500bps

as % total sales

2012-2017

Accelerate

growth &

diversify into

faster segments

DEVELOP

Key

Capabilities

FUND

the Journey

to Fuel Growth

DRIVE

Global

Expansion

EXPAND into

High Growth

Adjacencies


------- Estimated market* -------

Business 2015

Size

2015

Growth

2015 – 2020

Growth Investing in Faster Growth Segments

Endoscopy $3B 4% 4-6% Visualization, pulmonary therapies, endo ultrasound

Urology and

Pelvic Health $3B 4% 4-6% Stone, BPH, ED, visualization, international

Neuromodulation $2B 5% 5-7% Severe pain, Parkinson's, OAB, international

CRM $10B 2% 0-2% S-ICD & leadless solutions, HF diagnostic solutions

Electrophysiology $3B 14% 10-15% Atrial fibrillation, mapping & navigation

Peripheral $4B 4% 4-6% Drug-eluting SFA, atherectomy, oncology, liver cancer

IC (ex SH) $8B 1% 0-3% Complex PCI, FFR, & bioresorbable technologies

Structural Heart $1.8B 35% 15-20% TAVR, LAAC, mitral

WW Total ~$35B ~3-4%

* Market size and growth rates at constant currency and are BSX internal estimates

Market outlook and investment focus

~3-6%


• EM +12% FY15,

+21% Q1:16

operational revenue3

• China +20%

operational revenue3

• Est. EM $1B in 2016

• Est. EM 12% of

mix in 2016

(vs. 8% in 2012)

• Strong team

• Expanded

distribution

• Product

registrations

• R&D & training

centers

• China JV

(Frankenman)

Driving global expansion

U.S. 52% (+9%)

Europe 22% (+8%)

AMEA 20%

(+7%)

LACA 6% (+7%)

Global revenue mix

2015

---------------- Emerging Markets ----------------

Growth highlights Growth drivers

Operational Revenue3,4,5



• Accretive new

products

• 5-10% annual

standard cost

improvements

• Optimize plant

networks

• AMS benefit

• Reduce SG&A

• R&D

productivity

• Reduce

adjacency

dilution

• Outsourcing/

offshoring

• Lean business

initiatives

• AMS benefit

2012A*

2013A

2014A

2015A**

Gross Margin

Operating

Expenses

2017E

25%+

~+100bps

~+200bps

20.2%

18.9%

17.8%

Significant adjusted operating margin2 expansion:

Estimated +700bps from 2012-2017

22.3%

*Adjusted for estimated impact of Medical Device Tax (~100bps), based on actual 2013 impact



• Accretive new

products

• 5-10% annual

standard cost

improvements

• Optimize plant

networks

• AMS benefit

• Reduce SG&A

• R&D productivity

• Reduce

adjacency

dilution

• Outsourcing/

offshoring

• Lean business

initiatives

• AMS benefit

• Accretive new

products

• 5-10% annual

standard cost

improvements

• Optimize plant

networks

• Reduce SG&A

and adjacency

dilution

• R&D productivity

• AMS benefit

• Outsourcing/

offshoring

2015A*

Gross Margin

Operating

Expense

Reductions

2017E

Operating

Margin

Improvements

2020E

25%+

Adjusted OM expansion opportunities beyond 2017

22.3%

27-28%

~+100bps

~+200bps

~+200 to

300bps


1. Debt repayment

2. M&A in adjacent, high-growth markets

3. Maintain flexibility

– Litigation / tax contingencies

Cash flow outlook, capital allocation priorities

2014A 2015A 2016E*

$1.26B

$1.3B+

~$1.5B

Strong Cash Flow

Adjusted FCF6: 2014 – 2016E

2016 Capital

Allocation Priorities

*2016E represents guidance issued on Q4:15 earnings call, 2/4/16 See slide 14 for footnotes


BSX: What to expect from us

Consistently delivering on and exceeding financial goals1,2

• Strong culture fostering innovation and a “WINNING SPIRIT”

• 2015: 5% organic growth, +210bps adj. OM, 23% adj. EPS growth ex FX

• Q1:16: 8% organic growth, +260bps adj. OM, 41% adj. EPS growth ex FX

Transforming patients’ lives and leading in large global markets

• Entering faster growth segments, driving category leadership

• Building emerging markets scale and capabilities

Launching innovative new product cycle in 2016

• Driving consistent organic revenue growth with a long runway

Leading globally: More to come in 2017-2018 and beyond

• Launching into large, high growth markets with meaningful innovation

• Creating value: MSD rev. growth + adj. OM expansion = DD adj. EPS growth ex FX



Footnotes

1: Organic revenue growth excludes the impact of sales from divested businesses, changes in foreign

currency exchange rates and sales from the acquisitions of the interventional business of Bayer AG and

the American Medical Systems male urology portfolio over the prior year period.

2: Adjusted operating margin, and adjusted earnings per share are non-GAAP and exclude goodwill and

other intangible asset impairment charges, acquisition and divestiture-related net charges, litigation-

related charges, restructuring and restructuring-related charges, pension termination charges, discrete

tax items and amortization expense.

3: Operational revenue growth is at constant currency, and excludes divested businesses.

4: Percent of revenue shown on a constant currency basis.

5: LACA = Latin America and Canada; AMEA = Asia, Middle East , and Africa

6: Adjusted Free Cash Flow excludes any potential amounts related to acquisition-, divestiture- and

litigation-related items, significant tax audit settlements and restructuring and restructuring-related items.

For reconciliations of non-GAAP financial measures to the most directly comparable GAAP

figures, please refer to the Investor Relations section of our website at

www.bostonscientific.com.

http://www.bostonscientific.com/

Documents

Jefferies Healthcare Conference - Boston Scientific/media/... · 8 Boston Scientific – Jefferies Healthcare Conference, June 7, 2016 ----- Estimated market* ----- Business 2015