HEALTHCARE CONFERENCE JANUARY 2020 JOE WOODY CHIEF EXECUTIVE - - PowerPoint PPT Presentation

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HEALTHCARE CONFERENCE JANUARY 2020 JOE WOODY CHIEF EXECUTIVE - - PowerPoint PPT Presentation

J.P. MORGAN HEALTHCARE CONFERENCE JANUARY 2020 JOE WOODY CHIEF EXECUTIVE OFFICER 1 FORWARD-LOOKING INFORMATION Certain matters in this presentation and webcast, including our expectations and planning assumptions, and any estimates,


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J.P. MORGAN HEALTHCARE CONFERENCE

JOE WOODY CHIEF EXECUTIVE OFFICER JANUARY 2020

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FORWARD-LOOKING INFORMATION NON-GAAP FINANCIAL MEASURES

Certain matters in this presentation and webcast, including our expectations and planning assumptions, and any estimates, projections, and statements relating to our business plans, objectives, acquisitions and transformation initiatives, 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 conditions, S&IP separation execution and IT implementation, availability of drugs used in our Acute Pain products, other supply chain disruptions, and legislative and regulatory actions. There can be no assurance that these future events will

  • ccur as anticipated or that the Company’s results will be as 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 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. 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 and posted on our website (www.avanos.com/investors).

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$650M+ Global Revenue*

WHO WE ARE

Pain Management Chronic Care

Diversified portfolio with 8 market-leading products in the U.S.

International

Business operations in 90+ countries

U.S.

Creating Shareholder Value ~$10B Addressable Market Optimized cost structure M&A execution and integration Organic growth acceleration

Our Vision: To be the best at getting patients back to what matters

*2018 figure

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CHRONIC CARE

Leading market positions enhanced by recent bolt-on acquisitions

Addressable Market Product Portfolio

~$400M

Respiratory Health

~$1B

Digestive Health

Long-term Feeding Nasogastric Feeding Neonatal Feeding Closed Suction Continued market leadership with launch

  • f MIC-KEY* SF

in 2020 Demonstrated capability with leading position in nasogastric feeding Avanos enters into the neonatal market, a leading organic growth

  • pportunity

Enhances Respiratory Health portfolio and leverages existing sales and marketing infrastructure Mic-Key (legacy) Corpak (2016) NeoMed (2019) endOclear (2019) Digestive Health Respiratory Health

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PAIN MANAGEMENT

Opportunity to deliver much-needed non-opioid pain relief therapies

Addressable Market Product Portfolio

>$4B

Interventional Pain

>$4B

Acute Pain

100M >20M

Target U.S. surgical procedures Americans in chronic pain ON-Q (Legacy) GameReady (2018) Summit Medical (2019)

Clinically proven non-opioid therapy to reduce post-surgical pain Market-leading provider of cold and compression therapy systems Electronic ambulatory pumps

COOLIEF* (Legacy) COOLIEF* Technology Innovation

Only FDA-cleared RF treatment for OA knee pain Cooled and standard radiofrequency generator Next generation COOLIEF* probe

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REMOVING OBSTACLES FOR VALUE CREATION

2019 CHALLENGES 2020 PRIORITIES

Top line impacted by industry-wide drug shortage and pump filler shutdown IT implementation caused 3Q 2019 disruption Increased cash cost for transformation Build momentum in Acute Pain into 2021 to return Avanos to MSD growth IT stabilization M&A integration Positive free cash flow

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CATALYSTS FOR LONG-TERM VALUE CREATION

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INVESTING FOR THE FUTURE

▪ Continue educating private payors on clinical evidence and economic advantages of COOLIEF* ▪ Roll out new COOLIEF* products, including a next generation RF generator and probes ▪ Publish study on COOLIEF* vs. hyaluronic acid ▪ Expanded direct-to-patient advertising ▪ Significantly grew sales force ▪ CMS reimbursement decision finalized ▪ Published 6 studies that demonstrate the efficacy of COOLIEF* ▪ Publish study on COOLIEF* vs. standard RF ▪ Work with CMS to improve reimbursement levels for procedures performed in ASC settings CLINICAL AWARENESS COVERAGE EXPERTISE

Investments that generate breakthrough growth

2019 2020 2021

& Beyond

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Summit Medical Legacy Portfolio Leiters Partnership BioQ Internal Project

“Short” Shots “Short” Shots “Short” Shots

SURGICAL PAIN: SETTING THE STAGE FOR RETURN TO GROWTH

Taking action to bolster portfolio, win back sales and simplify the process for customers and patients

ON-Q Fixed Flow Rate Pump ON-Q Select-a-Flow Electronic Pump Drug + Pump Combination Device Electronic Nerve Block

“Short” Shots “Short” Shots

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DRIVING INTERNATIONAL GROWTH

Geographic Expansion Go-to-Market Execution Market Development

▪ Improve distributor management capability ▪ Targeted go-direct sales model ▪ Developed markets ▪ Emerging markets ▪ Incorporate recently acquired acquisitions ▪ Disease state awareness & referral pathway ▪ Physician education ▪ Reimbursement and healthcare economics ▪ Define Standard of Care

Enhanced leadership and focus on commercial excellence

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DELIVERING POSITIVE CASH FLOW IN 2020

Repeatable free cash flow acceleration

Return to normal capital spending Recapture prior year working capital inefficiencies Fewer unusual or non-recurring expenses

Bolsters already strong balance sheet

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FRAMEWORK FOR VALUE CREATION

Bring innovation to market via M&A and organic pipeline Accelerate sales internationally and stabilize ON-Q Disciplined pursuit

  • f complementary

M&A Gain earnings leverage to accelerate margins Continue to right-size cost structure and M&A integration Invested in priority areas to enhance growth

2019 2020 2021 & Beyond

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The best at getting patients back to the things that matter