Medtronic RTG Investor Day Presentation

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    Restorative Therapies Group RTG)

    INVESTOR DAYJUNE 6, 2016

    NEW YORK CITY

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    Restorative Therapies Group RTG)

    GEOFF MARTHAEVP & GROUP PRESIDENTRESTORATIVE THERAPIES GRO

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    2016 Investor D

    KEY GROWTH STRATEGIES

    1. RTG will reinvigorate therapy innovation across all businesses throu

    changes we have made in structure and talent

    Our disease focused businesses will deliver meaningful innovation t

    expanded emphasis across the patient care continuum and a consis

    of new products

    2. Our global footprint, breadth, and scale give us a fundamental adva

    emerging market therapy penetration and market share

    3. Value-Based Healthcare episode of care bundles create a unique op

    business model innovation and entrance into new markets

    THEMES FOR TODAY’S DISCUSSION

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    Therapy Segment

    FY17

    WW Market

    Size

    FY16-21E

    CAGR

    Market Growth

    FY16

    MDT Share

    /Trend

    Core SpineBiologics

    InFuseValue Orthopedics*

    $7.5B

    $0.8B

    $0.5B

    $1.1B

    Low-Single

    Mid-Teens

    26%

    31%

    100%

    13%*

    Brain ModulationNeurosurgery

    Stroke

    $0.6B

    $2.7B

    $2.2B

    Upper-Single

    92%

    38%

    31%

    Kyphoplasty & Ablation

    Pain StimulationPain Pumps

    $0.6B

    $1.7B$0.3B

    Mid-Single

    55%

    38%95%

    Pelvic HealthENT

    Advanced Energy

    $0.7B

    $1.2B

    $0.4B

    Mid -Single

    Mid-Single

    Low-Teens

    85%

    51%

    84%

    ATTRACTIVE MARKETS WITH INNOVATION HEADROOMSTRONG SHARE POSITION ACROSS THE PORTFOLIO

    $20.3B Mid-SingleTotal RTG ~40%

    $7.2Bbusiness 

    ~50M patients~10% served

    TODAY

    ~3%MarketGrowth Rate

    *Market Share represents China only – business segment is Kanghui / ** based on comparable portfolio

    FY11

    ~6%MarketGrowth RateFY16

    5-6%MarketGrowth Rate

    FY16- FY21

    1) Constant currency, adjusted for the extra week in Q1.

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    Restorative Therapies Group RTG) 2016 Investor D

    EMPHASIZING EXECUTION TO DELIVER GROWTHUNLOCKING POTENTIAL

    LeveragIntegrated PlatformsOrganized to Innovate

    Leverage breadth

    develop new servimprove outcome

    Integrating our suite of surgical solutions

    to drive improved clinical and economicoutcomes.

    Seamless workflow creates an enhanced

    surgical experience for physicians and

    makes procedures more predictable.

    Empowered GM’s prioritizing R&D

    investment and delivering a predictable

    cadence of new products.

    Aligning businesses around disease states 

    and conditions.

    Group-level leader driving R&D execution.

    Integrated comm

    value to administbroader stakehol

    a

    Group-level leaders driving collaboration.

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    2016 Investor D

    ORGANIZED TO CONSISTENTLY DELIVER INNOVATION THAT MATTEALIGNING STRUCTURE TO STRATEGY

    FY 16

    $7.2B 

    Brain PainSpine

    Modulation

    Neurovascular

    Neurosurgery

    Stimulation

    Pump

    Interventional

    Biologics

    Core Spine

    Restorative Therapies Group

    Enabling Functions (Operations, R&D, Quality, and

    BULeader

        G   e   n   e   r   a    l

        M   a   n   a   g   e   r   s

    Integrated Global Sales Structure

    Kanghui 

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    Restorative Therapies Group RTG) 2016 Investor D

    PRESE

    Sharing Direct Accountability forOutcomes

    Market Development andLocalization

    Deliver Steady Cadence ofInnovation that Matters

    EXECUTING ON WINNING GROWTH STRATEGIESEMPHASIS FOR TODAY’S DISCUSSION

    Therapy

    Innovation

    Economic

    Value

    Globalization

    • Spine

    • Brain

    • Pain

    •Spec

    • Eme

    • Value

    PAN

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    2016 Investor D

    HEADWINDS ABATING, WHILE TAILWINDS EMERGING FROM FOCUSEFOUNDATION ESTABLISHED TO RESTORE GROWTH

    FY11 FY12 FY13 FY14 FY15 FY16

    (3.4%)

    +2.4%

    (5.8%)

    (2.6%)

    (0.5%)Flat

    S

    D

    FY

    C

    Destabilization & Decline

    MDT SpineRevenue Trend*

    Headwinds

    Tailwinds

    *WW Core and Biologics (incl. INFUSE) VS PY: constant currency

    InFuse  & KyphonChallenges

    Market GrowthChallenges 

    StabilizationRet

    G

    New

    Product

    Momentum

    InFuseYale Study

    Reinvigorated Product Development

    InFuseSpine Journal

    Publication

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    2016 Investor D

    SPINE MOMENTUM BUILDING: FY16 RECAP

    +$60MFY16

    ~$25MFY16 vs FY15

    As en

    grow

    head

    of ne

    deliv

    INFUSE®

    Bone Graft 

    REBOUND

    PRODUCT

    INNOVATIONAND SET

    INVESTMENT

    ~3.0%FY16-21 CAGR

    15-20% of

    RevenueFY17-FY21

    Infuse WW Revenue Trend as report in $M

    +$30MSet Investment

    FOUNDATION ESTABLISHED TO RESTORE GROWTH

    1

    2Biolo

    shift

    INFU

    rebo

    indic

    794

    468476

    500515-525

    G O

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    2016 Investor D

    FUTURE GROWTHPILLARS TO DELIVER GROWTH

    SURGICAL SYNERGYTM

    “SPEED-TO-SCALE”

    Speed of Innovation  Synchronized procedural launches Scale at Launch 

    StronSurgi

    differ

    Medt

    exper

    Accel

    execu

    produsoluti

    1

    2

    “SPEED TO SCALE”

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    2016 Investor D

    “SPEED-TO-SCALE”INNOVATION, PREDICTABILITY, AND IMPACT

    “SPEED TO SCALE”

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    2016 Investor D

    “SPEED-TO-SCALE”INNOVATION, PREDICTABILITY, AND IMPACT

    Speed of Innovation 

    Concept to Commercialization 

    Execution

    On-time & on-budget delivery

    to majormilestones

    Productivity

    Drive 20%functionalproductivity

    improvement

    Quality

    Maintain orEnhance

    Product Quality

    SpeedReduce

    developmentcycle times

    40-50% 

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    “SPEED TO SCALE”

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    2016 Investor D

    “SPEED-TO-SCALE”INNOVATION, PREDICTABILITY, AND IMPACT

    Speed of Innovation 

    Concept to Commercialization 

    Synchronized Procedural Launches

     All components of procedure must be in place to initiate launch.

    Sat

    Reduce time to s

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    2016 Investor D

    CASE STUDY: OLIF PROCEDURE LAUNCH (OBLIQUE LATERAL INTERBA PROCEDURAL LAUNCH REACHING SCALE QUICKLY

    Procedure Benefits

    Patient: Truly MIS (avoids disrupting nerve-filled psoas muscle)

    Surgeon: Easier to access to more discs;more comfortable positioning (ergonomic) ;

    less fluoro (radiation)

    Economic: Neuromonitoring optional; noflip (and associated time) to access all lumbar

    levels 

    OLIF Procedural Component Q4 FY16

    Access System

    Interbody

    Fixation

    Biologics

    Enabling Technology

    Surgeon Training

    Rep Training

    Clinical Evidence/EV

    Compo

        M   e    t   a    l

        P   r   o    f    i   c    i   e   n   c   y

    Synchronized Launch

    PREDICTABLE CADENCE AROUND PROCEDURAL SOLUTIONS

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    2016 Investor D

    PREDICTABLE CADENCE AROUND PROCEDURAL SOLUTIONSINNOVATION, PREDICTABILITY, AND IMPACT

    From launching

    Products…..

    ….to launching

    Procedures

    Procedural Solution

    SURGICAL SYNERGY: SPINE

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    Restorative Therapies Group RTG) 2016 Investor D

    SURGICAL SYNERGY: SPINECREATING A UNIQUE MEDTRONIC SURGICAL EXPERIENCE

    FY 16 Business Imp

    • Accounts with O-arms incre

    24% in FY16

    Nearly 1 in 4 procedures nav• O-Arm accounts grew 4X fas

    • ~ 15 new deals securing mar

    in Q4

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    Restorative Therapies Group RTG)

    BRAIN THERAPY INNOVATION

    Deliver Steady Cadence ofInnovation that Matters

    TherapyInnovation

    MEDTRONIC BRAIN THERAPIES

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    2016 Investor D

    THE GLOBALLY RECOGNIZEDINNOVATOR

    OF BRAIN DISEASE SOLUTIONS 

    ~$2B business

    #1 Global Market Share

    TODAY

    $3

    #1 Glo

    FVISION & ASPIRATIONMEDTRONIC BRAIN THERAPIES

    ARRAY OF PLATFORMS TO ADVANCE SCIENCE

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    Restorative Therapies Group RTG) 2016 Investor D

    ARRAY OF PLATFORMS TO ADVANCE SCIENCETHE INDUSTRY’S BROADEST PORTFOLIO OF BRAIN THERAPIES

    Neurovascular Modulation Neur

    Enabling Technologies

    Acute Ischemic Stroke

    Hemorrhagic Stroke

    Parkinson’s Disease

    Essential TremorEpilepsy*

    Brain Tum

    Epilepsy*Hydrocep

    Visualization, Navigation,

    Laser Ablation, Powered Surgical & Robotics

    Mid -Single

    Growth

    FY16-FY21

    ~$500MFY16 Revenue

    Mid -Teens

    Growth

    FY16-FY21

    ~$600MFY16 Revenue

    ~$900MFY16 Revenue

    *Current FDA status is approvable **Future indications

    DELIVERING GROWTH IN THE BRAIN BUSINESS

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    2016 Investor D2016 Investor D

    THERAPY INNOVATIONTherapy Innovation

    FY18FY17 FY1

    Expanded MRI Labeling

    Stealth Cranial 3.0

    Olympus DBS

    PC & RC+ Sensing

    Le

    Ref

    DBS Extension-

    Bootless, Seals

    Stealth Midas

    StrataMR

    Stealth Connect

    Cranial Robot

    SureTune

    DBS Planning

    FY16

    Barrel™

    (US IDE)

    Pipeline G

    (Orac

    Pipeline Gen#4(Maverick)

    Axium Gen#2

    (Fitz Roy)

    Axium Gen#2 (Axium

    Prime Detachable Coil

    (Extra Soft))

    Medina (

    Medina (EU)

    Artisse ™ Intrasaccular

    Device (EU)

    Solitaire Gen#3(Solitaire Platinum)

    ARC ™

    Support Catheter 

    UNO™

    (US)

    ARC ™ Catheter Gen# 2

    Epilepsy PMA*

    EARLY Onset PD

    US Labeling

     All products not approved, for pipeline illustration purposes only

    Breadth and Depth Steady Cadence Advanced G

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    PAIN THERAPIESOPIOID ADDICTION A GROWING EPIDEMIC

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    2016 Investor D

    OPIOID ADDICTION: A GROWING EPIDEMIC

    * Projected growth from 2015 to 2025 

    Large market for pain

    treatment options (US)

    Annual Pain Market Growth*7%

    ~$7B

    An Opportunity for Leadership• Fragmented patient care and protocols

    • Provider, payor, and industry alliances on outcomes

    • Public health crisis on opioid addiction

    259 M

    US prescriptions for

    opioid pain

    medication; enough

    for 1 bottle for every

    adult1

    $

    1.9MNumber of Americans

    who suffer from

    opioid abuse or

    dependence1

    1. http://www.asam.org/docs/default-source/advocacy/opioid-addiction-disease-facts-figures.pdf

    2. http://khn.org/news/opioid-epidemic-fueling-hospitalizations-hospital-costs/

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    MEDTRONIC PAIN THERAPIESADDRESSING THE OPIOID EPIDEMICSTRONG PRESENCE WITH SPECIALISTS

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    2016 Investor D

    MEDTRONIC PAIN THERAPIES

    Perform 9 of 10

    musculoskeletal pain 

    procedures.

    75% are MDT

    Customers.

    STRONG PRESENCE WITH SPECIALISTS

    PainSpecialists

    Perform 9 of 10 cancer

    pain procedures.

    80% are MDT

    Customers

    InterventionalRadiologists

    Neurosurg

    Perform >

    implants

    SCS 

    >80%

    Cus

    MEDTRONIC AS THE GLOBAL LEADER IN TREATING PAINNEAR TERM PRIORITIES

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    2016 Investor D

    NEAR TERM PRIORITIES

    TYRXInfection Control

    MRI SafetyWithout CompromisedDevice Selection

    • Smal

    • Table

    • Nove

    Glob

    AdaptiveStim®Right Dose to Right Location

    Leverage MDT exclusives, unmatched c

    and integrated sales stru

    Return to Growth

    SPINAL CORD STIMULATIO

    Pump

    Interventional

    Ablation: Penetrate spine cancer

    market and drive BKP pull through

    Vertebral Augmentation:

    Leverage new products and new

    global markets

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    SPECIALTY THERAPIES: PELVIC HEALTH, ENT, ADVANCED ENERGYATTRACTIVE GROWTH VERTICALS

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    2016 Investor D

    ATTRACTIVE GROWTH VERTICALS

    AdvancExpanding A

    Penetration

    Joint & Spine

    Oncology

    Lead (Gen Repla

    ENT & Neuro    M   a   r    k   e    t

        P   e   n   e    t   r   a    t    i   o   n

        P    l   a    t    f   o   r   m 

        I   n   n

       o   v   a    t    i   o   n

    AEX™  Aq

    Ear, Nose & Throat (ENT)

        E   x   e   c   u    t    i   o   n    &

        E   x   p   a   n   s    i   o

       n

        A    d    j   a   c   e   n    t

        O   p   p   o   r    t   u   n    i    t    i   e   s

    Therapy Expansion

    Hearing RestorationENT Office

    Disease StateEmerging

    Markets

    Pelvic Health

    NURO™ External Stim

    Improving Access, Advancing MIS, and

    Expanding Indications

        C   a   r   e

        C   o   n    t    i   n   u   u   m 

        P   e   n   e    t   r   a    t    i   o

       n    &

        E   x   p   a   n   s    i   o

       nLeadership Position

    in Pelvic Health

    High SingleGrowth

    FY16-FY21

    >$500MGrowth

    FY16-FY21

    Consistently Positive

    Patient Experience

    RESTORATIVE THERAPIES GROUPPOSITIONED FOR GROWTH

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    2016 Investor D

    $6,042

    $7,210

    GROWTH D

    Brain Therapies P

    Innovation

    Specialty Therap

    Innovation and C

    Expansion

    Spine: Internatio

    Emerging Market

    POSITIONED FOR GROWTH

    *Growth Rate @ Constant FX

    ~+4%CAGR*

    FY16AFY11A FY21E

    Mid-

    Single 

    ~$10B

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