STRYKER ANALYST MEETING
September 2014
STRYKER ANALYST MEETING September 2014 FORWARD LOOKING STATEMENT - - PowerPoint PPT Presentation
STRYKER ANALYST MEETING September 2014 FORWARD LOOKING STATEMENT Certain statements made in the presentation may contain information that includes or is based on forward-looking statements within the meaning of the federal securities law that
September 2014
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A copy of this presentation will be available for 90 days on the Events & Presentations page of the For Investors section of our website at www.Stryker.com.
Certain statements made in the presentation may contain information that includes or is based on forward-looking statements within the meaning of the federal securities law that are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level
measures that could adversely affect the price of or demand for our products; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third- party payors; a significant increase in product liability claims; the ultimate total cost with respect to the Rejuvenate and ABG II matter; the impact of investigative and legal proceedings and compliance risks; resolution of tax audits; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; changes in the competitive environment; our ability to integrate acquisitions; and our ability to realize anticipated cost savings as a result of workforce reductions and other restructuring activities. Additional information concerning these and other factors is contained in our filings with the U.S. Securities and Exchange Commission, including
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ORTHOPAEDICS SPOTLIGHT ON INSTRUMENTS GLOBAL QUALITY & OPERATIONS SPOTLIGHT ON CHINA INVESTOR Q&A MAKO PANEL
David Floyd Group President, Orthopaedics Tim Scannell Group President, MedSurg and Neurotechnology Lonny Carpenter Group President, Global Quality and Operations Ramesh Subrahmanian Group President, International Moderator: David Floyd Group President, Orthopaedics
PRODUCT FAIR OVERVIEW
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Kevin Lobo Chairman and Chief Executive Officer Orthopaedics Focus
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MISSION VALUES
INTEGRITY ACCOUNTABILITY PEOPLE PERFORMANCE
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Endoscopy 13% Medical 8% Sustainability Solutions 2% Spine 8% Neurovascular 5% Neuro Powered Instruments 3% CMF 3% Knees 15% Hips 14% Trauma & Extremities 12% Other 3% Instruments 14% 5
2013 Sales
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3 Year CAGR R&D
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2.6% 2.4% 2.1% 4.2% 5.1% 4.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2012 2013 1H2014
MedTech Market** Stryker Organic Revenue Growth*
* Organic revenue growth removes the impact of changes in foreign currency exchange rates, divestitures and the first twelve months of acquisition sales that affect the comparability and trend of sales. **MedTech market growth is based on Company research of 20 companies
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Share Repurchases: $1.0B Continued share buybacks over time Dividends: $1.0B Committed to increasing the dividend at or above EPS growth M & A: $4.5B Focused on driving sales growth in core and adjacent markets 2011–2013 Capital Deployment History
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accelerate our top line growth
5.0 – 6.0% Organic sales growth $4.75 – 4.80 Adjusted diluted net earnings per share $1.12 – 1.16 Adjusted diluted net earnings per share
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400 600 800 1,000 1,200 1,400 1,600 1,800
Global Revenue ($ Millions)*
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* Revenue includes Neuro Powered Instruments and Stryker Interventional Spine
Surgical
Navigation
Service
Neuro Powered Instruments
Interventional Spine (IVS)
*Neuro Powered Instruments and Interventional Spine are reported in the Neurotechnology and Spine business segment
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*
Sonopet (2010) Sterishield (1994) Neptune (2000) SurgiCount (2014)
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innovation has driven the growth
building new innovations in adjacent specialties such as spine, plastics, and reconstructive surgery
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acquisition in 1994
strategies include expanding our
and entering new surgical specialties
focus on intraoperative communication and comfort technologies
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share due to recall and further penetrating the fluid waste management market
at improving the user experience and growing the disposable base business
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Quarter
Neptune Waste Management < Re-launch < Recall
Revenue
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SurgiCounter Safety-Sponges SurgiCount360
designed for hands-free use
station with extra battery
permanently fused to each Safety-Sponge
Sponges to be tracked with a simple scan
service, campus, and date
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Quality First Compliance Quality Products/ Services Enhance Brand Equity Plant Network Optimization Strategic Sourcing Core Competency Alignment Automation/ Lean Processes Supply Chain Optimization Warehousing / Logistics Network Integrated Business Planning Global Inventory Mgmt
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FY12 FY17
3 Focus Areas
$500m Cumulative Cost Savings
continues to strengthen
leverage
and logistics costs continues
in early stages
acquisitions
trend continues
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STRYKER IN EUROPE
(France/Ireland/Germany/Switzerland)
Amsterdam
RHQ OBJECTIVES
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United States
MSNT Divisions Orthopaedics Divisions
International 6 Regions
Europe Japan South Pacific Americas China/Korea/ASEAN EEMEA-I
Trans-Atlantic US / Europe International
Operating Model
and Orthopaedics
United States / Europe
shared service structure
HISTORICAL 2015
Objectives
model
MSNT Divisions Orthopaedics Divisions
5 Regions
Japan South Pacific Americas China/Korea/ASEAN EEMEA-I
63% 40% 44% 26% 42% 37% 11% 18% 19%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Europe US World Wide
2013 Stryker Sales Mix
Reconstructive MedSurg Neurotechnology & Spine
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AN EVOLVING LANDSCAPE
market in the world
market after the US
CHINA MEDICAL TECHNOLOGY MARKET
33% 36% 31% 19% 43% 39%
2011 2020
'11-'15E CAGR '15-'20E CAGR
DISTINCT MARKET SEGMENTS IN CHINA
Premium Mid Low
11% 21% 24% 8% 17% 15%
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06 07 08 09 10 11 12 13
STRYKER IN CHINA HISTORICAL GROWTH
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STRYKER IN CHINA
distribution reach (premium segment)
strong in mid-tier market segment
Suzhou (Stryker brand - 1) Changzhou (Trauson brand - 2)
STRYKER STRATEGY
franchises for leadership
Trauson brand and low cost business model
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EXPAND MARKET COVERAGE
2015 (60% coverage)
OPTIMIZE GO TO MARKET MODEL
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PREMIUM PORTFOLIO DEVELOPMENT
for Chinese anatomy
BROAD PORTFOLIO
(Leverage Leading Position in Endoscopy)
INVEST IN EDUCATION & TRAINING
takes training to customers
ENHANCE SERVICE CAPABILITY
Spine Neuro Hips Trauma Knees Other Endoscopy Instruments
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PORTFOLIO AND R&D FOCUS
spine portfolio
broader reconstructive market
manufacturing capabilities
SUCCESSFUL INTEGRATION – MAINTAINED BUSINESS MOMENTUM
growing ahead of market (46% growth YTD 2014)
PLANS
recon mid-tier market segment
INTERNATIONAL LAUNCHES 2014
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Closing remarks
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Vice President and General Manager of Stryker Mako
Chairman of The Center for Orthopaedic Research and Education
Partner, South County Orthopaedics and Physical Therapy, Inc.
Chief of the Adult Reconstruction and Joint Replacement Service, Hospital for Special Surgery
September 2014