1
J.P. MORGAN HEALTHCARE CONFERENCE
JOE WOODY CHIEF EXECUTIVE OFFICER JANUARY 2020
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,
1
JOE WOODY CHIEF EXECUTIVE OFFICER JANUARY 2020
2
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
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).
3
$650M+ Global Revenue*
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
4
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
in 2020 Demonstrated capability with leading position in nasogastric feeding Avanos enters into the neonatal market, a leading organic growth
Enhances Respiratory Health portfolio and leverages existing sales and marketing infrastructure Mic-Key (legacy) Corpak (2016) NeoMed (2019) endOclear (2019) Digestive Health Respiratory Health
5
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
6
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
7
8
▪ 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
9
Summit Medical Legacy Portfolio Leiters Partnership BioQ Internal Project
“Short” Shots “Short” Shots “Short” Shots
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
10
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
11
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
12
Bring innovation to market via M&A and organic pipeline Accelerate sales internationally and stabilize ON-Q Disciplined pursuit
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
13
The best at getting patients back to the things that matter