Edwards Lifesciences Corporation · NYSE:EW
Edwards Lifesciences — Investor Day (December 2020)
118 slides from Edwards Lifesciences's investor day presentation, Dec 10, 2020
Slide 1: 2020 Investor Conference
2020 Investor Conference December 10, 2020
Slide 2: Opening Remarks
Opening Remarks Michael A. Mussallem Chairman and CEO
Slide 3: Our Credo
Our Credo Through our actions, we will become trusted partners with customers, colleagues, and patients – creating a community unified in its mission to improve the quality of life around the world. Our results will benefit customers, patients, employees and shareholders. We will celebrate our succe
Slide 4: Our Aspirations
Our Aspirations Fostering an inclusive culture where all employees grow and thrive Transforming patient lives with breakthrough medical technologies Edwards is a global leader Excelling as a trusted partner through distinguished quality and integrity dedicated to… Passionate engagement that strength
Slide 5: Helping Patients Around the World
Helping Patients Around the World 94% 97% Sales from Employees consider products with what’s important to #1 global market patients when making share decisions 15,000+ Global employees (50%+ Millennials 7 and Generation Z) ~2,000 Manufacturing Engineers 80%+ facilities around the world Charitable em
Slide 6: Patient-Focused Innovation Strategy
Patient-Focused Innovation Strategy Focus Singular focus on the large unmet needs of structural heart and critically ill patients Create Leadership Meaningful Innovation Value by Lead groundbreaking Pioneer breakthrough Transforming standards of care through technologies with Patient Care trusted re
Slide 7: $10B by 2025
Edwards’ patient-focused innovation strategy has produced sustained underlying sales growth Global Transcatheter Opportunity Focused on opportunities where $10B by 2025 + patient demand is very large Edwards Sales $4.3 ($ in billions) $3.7 $3.0 $3.4 Long-term Track record of triple wins: $2.3 $2.5 i
Slide 8: Edwards 2021 and Beyond
Edwards 2021 and Beyond Edwards
Slide 9: 2021 expected to be a year of significant growth and investment in our future
2021 expected to be a year of significant growth and investment in our future 2021 Expectations Mid-teens $2.00 - $2.20 Underlying net Adjusted sales growth EPS TAVR Surgical • Therapy expansion • Surgeon partnership • Technology advances • Leading pipeline • Geographic expansion • Growth segment fo
Slide 10: 2021 Product Group Milestones
2021 Product Group Milestones INSPIRIS EARLY TAVR Asymptomatic China Launch Enrollment Completion Japan TAVR Low Risk Approval Critical Care Viewfinder Next Generation Connectivity PASCAL Delivery System MITRIS Solution Alterra Initial Clinical Experience US and Japan Launch Adaptive Prestent Expand
Slide 11: 2020 Investor Conference Agenda
2020 Investor Conference Agenda Transcatheter Aortic Valve Replacement Larry Wood and Huimin Wang, M.D. Surgical Structural Heart Daveen Chopra Advanced Technologies Todd Brinton, M.D. Transcatheter Mitral and Bernard Zovighian and Jean-Luc Lemercier Tricuspid Therapies Critical Care Katie Szyman Fi
Slide 12: Edwards' Executive Leadership Team
Edwards’ Executive Leadership Team Michael Mussallem Donald Bobo, Jr. Todd Brinton, M.D. Chairman & CEO Strategy & Corporate Chief Scientific Officer Long-tenured expert Development healthcare executives Daveen Chopra Jean-Luc Lemercier Dirksen Lehman Surgical Structural EMEA, Canada Public Affairs
Slide 13: Helping Patients is Our Life’s Work, and, row
Helping Patients is Our Life’s Work, and, row fife”
Slide 14: Transcatheter Aortic Heart Valves
2020 Investor Conference Transcatheter Aortic Heart Valves
Slide 15: We entered 2020 with strong momentum on a path to exceed our goals
We entered 2020 with strong momentum on a path to exceed our goals… • PARTNER 3 results demonstrated SAPIEN 3 is the only valve superior to surgery EW Global TAVR Sales ($M) • Low-risk approval in U.S. and EU • In U.S., revised NCD drove therapy access • Strong trajectory in the first 10 weeks of 20
Slide 16: …then the pandemic hit
…then the pandemic hit • All non-emergent hospital procedures were deferred • Hospitals had to re-think medical care and EW Global TAVR Sales ($M) resources as COVID-19 patients overwhelmed the system • In many areas, hospitals reserved critical resources in anticipation of pandemic wave, deferring
Slide 17: But we did not stop…
But we did not stop… Severe Aortic Severe AS patients’ mortality Helping patients Stenosis is a deadly rates increase drastically as remains our top disease patients wait for treatment priority EW Global TAVR Sales ($M) We remain laser focused on patient care and clinical partnership Q1 Q2 Q3 Q4 Q1
Slide 18: Bicuspid precaution removed
Bicuspid precaution removed Provides further confidence for low risk, younger patients Low rates of complications that matter most to bicuspid patients1 30 Days 1 Year CEC-adjudicated Event (n=71) (n=71) All-cause mortality 0% 1.4% All stroke 2.8% 2.8% Disabling stroke 0% 0% New permanent 9.9% 11.3%
Slide 19: SAPIEN 3 TAVR Now Approved for TAVR-in-TAVR Indication
Edwards SAPIEN 3 TAVR Now Approved for TAVR-in-TAVR Indication Provides long-term treatment option for patients with AS and reflects our dedication to long-term care 12/10/2020 6
Slide 20: Expanding Options for Congenital Pulmonic Heart Disease Patients
Expanding Options for Congenital Pulmonic Heart Disease Patients • SAPIEN 3 now approved for pulmonic patients (direct valve replacement) • Alterra Adaptive Prestent and SAPIEN 3 Pulmonic System expands therapy • Alterra U.S. Approval anticipated in 2H 2021 SAPIEN 3 Valve Alterra Adaptive Prestent C
Slide 21: SAPIEN 3 Now Approved in China For High Risk Patients
SAPIEN 3 Now Approved in China For High Risk Patients • Focused on establishing strong relationships to become the trusted clinical partner • Patient outcomes remain the priority • Contributor to long-term growth 12/10/2020 8
Slide 22: The COVID-19 experience helped to inform our future
The COVID-19 experience helped to inform our future • Patients with Aortic Stenosis don’t wait well, and TAVR is an essential procedure • High-touch model remains valued • We expect hospitals to adapt to local outbreaks and prioritize structural heart procedures until the pandemic subsides • TAVR ou
Slide 23: Data from New York City and Switzerland demonstrate risks of waiting
Data from New York City and Switzerland demonstrate risks of waiting “TAVR Delays During Pandemic’s Peak Led to Hospitalizations, Deaths”, www.tctmd.com, Sept 30, 2020 12/10/2020 10
Slide 24: PARTNER Best-in-Class Outcomes
PARTNER 3 Best-in-Class Outcomes 99% Freedom from death 96% of patients 90% did not need to be and disabling stroke discharged home rehospitalized at 1 year within 2 years Low Low rates pacemaker of PVL rates PVL: Paravalvular Leak 12/10/2020 11
Slide 25: Edwards' TAVR allows hospitals to treat patients with confidence
Edwards’ TAVR allows hospitals to treat patients with confidence Low Short Patients Low complication length-of-stay discharged re-hospitalization rates home rates TAVR has become a healthcare priority and Edwards’ TAVR advantage is now stronger than ever PARTNER 3 Trial data, 2019 12/10/2020 12
Slide 26: TAVR fundamentals remain strong in developed markets around the world
TAVR fundamentals remain strong in developed markets around the world SAPIEN 3 now approved in China For High-Risk Patients Long-term opportunity • Treatment rates • Aging population • Mix of countries with remain low increasing rapidly high and low treatment penetration • Opportunity with • Mat
Slide 27: Asymptomatic and Moderate Risk Clinical Trials
Asymptomatic and Moderate Risk Clinical Trials Expected to add significant growth beyond 2024 • Beyond Severe Aortic stenosis, we believe our TAVR therapy may benefit patients with Moderate Aortic Stenosis • Currently working closely with KOLs on a pivotal trial design Anticipate FDA approval to sta
Slide 28: Our portfolio is constantly evolving
Our portfolio is constantly evolving Next-Generation SAPIEN X4 SAPIEN 3 SAPIEN 3 Ultra Clinical work expected to begin in U.S. in 2021 U.S. and EU launches evolutionary advancements Revolutionary platform SAPIEN X4 Caution: Investigational Devices. Not available for commercial sale. 12/10/2020 15
Slide 29: 2021 Global Sales Outlook
2021 Global Sales Outlook Headwinds Tailwinds $3.6B 20% Overall healthcare Therapy benefits and budget constraints $3.2B strong patient preference 15% Low risk expansion Competition in key regions 2021E TAVR Estimated Global Sales and Sales Growth 12/10/2020 16
Slide 30: Executive Summary
Executive Summary • Aortic Stenosis is a deadly disease and timely treatment is paramount • Globally, diagnosis and treatment rates of AS remain low providing opportunity for low-double digit TAVR growth long-term • We have learned from the pandemic and Edwards’ TAVR therapy fundamentals remain stro
Slide 31: Important safety information: SAPIEN 3 systems
CAUTION: Federal (United States) law restricts these devices to sale by or on the order of a physician. See instructions for use for full prescribing information, including indications, contraindications, warnings, precautions and adverse events. Edwards SAPIEN 3 THV System and Edwards SAPIEN 3 Ultr
Slide 32: Precautions: THV-in-THV procedures
Precautions: Safety, effectiveness, and durability have not been established for THV‐in‐THV procedures. Long‐term durability has not been established for the valve. Regular medical follow‐up is advised to evaluate valve performance. Limited clinical data are available for transcatheter aortic valve
Slide 33: Additional potential risks associated with use of the valve
Additional potential risks associated with the use of the valve, delivery system, and/or accessories include: cardiac arrest; cardiogenic shock; emergency cardiac surgery; cardiac failure or low cardiac output; coronary flow obstruction/transvalvular flow disturbance; device thrombosis requiring int
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Slide 35: Surgical Structural Heart
2020 Investor Conference Surgical Structural Heart
Slide 36: Surgical Structural Heart brings leading innovation
Surgical Structural Heart brings leading innovation • Current $1.8B surgical structural heart market expected to grow mid-single digits through 2026 • We extended our leadership as the partner of choice for cardiac surgeons with three product launches in 2020 • We continue to bring life-saving surgi
Slide 37: Adult cardiac surgery continues to grow mid-single digits
Adult cardiac surgery continues to grow mid-single digits driven by awareness and an aging population Surgical Aortic Valve Developed Regions Emerging Regions Replacement Growth in emerging regions equally offset decline in developed regions Surgical Mitral Valve Replacement and Repair Continued glo
Slide 38: Surgical aortic cases continue to grow in segments and emerging regions
Surgical aortic cases continue to grow in segments and emerging regions with less TAVR impact Surgical Aortic Procedures (U.S. & EU) Aortic Patients Best Treated Surgically Growth (20-26) Isolated ssAS1 Combined ssAS1 Combined Moderate AS Younger, active patients who Patients with complex disease Pa
Slide 39: Less than 2% of mitral valve disease patients are treated today
Less than 2% of mitral valve disease patients are treated today, with minimal transcatheter cannibalization Surgical Mitral Procedures (U.S. & EU) Mitral Patients Best Treated Surgically Growth (20-26) Functional MR Degenerative MR Rheumatic, Surgical low risk degenerative Patients with complex Pati
Slide 40: Robust clinical evidence for RESILIA tissue technology
We continue to generate robust clinical evidence for our leading RESILIA tissue technology Anti-calcification to improve tissue durability RESILIA Tissue Technology Residual aldehydes on RESILIA permanently Capped aldehydes block tissue attract calcium caps residual aldehydes calcium EU Feasibility
Slide 41: INSPIRIS is now the leading aortic surgical valve in the world
INSPIRIS is now the leading aortic surgical valve in the world • Provides RESILIA tissue and VFit technology for potential future valve-in-valve procedures • #1 implanted aortic surgical valve in the U.S. and Japan, launching in China in 2021 • Continuing adoption across U.S. and Europe 12/10/2020 7
Slide 42: KONECT addresses key unmet needs of patients
KONECT addresses key unmet needs of patients and drives growth in 2021 • Launched in the U.S. in June 2020 as the first pre-assembled, ready-to-implant tissue conduit • Designed for complex aortic valve patients with combined aortic root disease • Impacts ~7,500 surgical procedures annually in the U
Slide 43: MITRIS is designed for active mitral patients
MITRIS is designed for active mitral patients who might otherwise receive a mechanical valve • Differentiating RESILIA tissue, ease-of-use enhancements, and valve-in-valve compatibility • Growth opportunity as 60% of global mitral valve replacement patients receive a mechanical valve • Launching in
Slide 44: HARPOON transforms surgery for degenerative mitral regurgitation
HARPOON transforms surgery for many patients with degenerative mitral regurgitation • Standardizing mitral repair with an echo- guided, beating-heart procedure • Launched in 2020 with potential to convert ~20k surgical repair patients across the U.S., Europe, and Japan • Started the RESTORE U.S. piv
Slide 45: Our strategy will provide a balanced portfolio
Our strategy will provide a balanced portfolio and will extend patient impact Surgical Structural Heart Revenue by Segment Aortic Mitral Other Lower contribution from SAVR Current Higher mitral growth contribution Future More surgical solutions for unmet needs 12/10/2020 11
Slide 46: 2021 Global Sales Outlook
2021 Global Sales Outlook Headwinds Tailwinds $900M Continued TAVR Adoption of RESILIA conversion in U.S. & EU $800M products Overall healthcare Accelerated mech-to-tissue budget constraints conversion 2021E Surgical Structural Heart Estimated Global Sales 12/10/2020 12
Slide 47: Executive Summary
Executive Summary • The Surgical Structural Heart market is forecast to grow in areas with unmet patient needs • Our innovation strategy focuses on transforming surgical patients' lives with life-saving surgical technologies 12/10/2020 13
Slide 48: Important Safety Information: INSPIRIS RESILIA Aortic Valve
Important Safety Information: INSPIRIS RESILIA Aortic Valve Indications: For use in replacement of native or prosthetic aortic heart valves. Contraindications: There are no known contraindications with the use of the INSPIRIS RESILIA aortic valve. Complications and Side Effects: Thromboembolism, val
Slide 49: For professional use: indications and trademarks
For professional use. For a listing of indications, contraindications, warnings, precautions and adverse events, please refer to the Instructions for Use (consult eifu.edwards.com where applicable). Edwards devices placed on the European market meeting the essential requirements referred to in Artic
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Slide 51: Transcatheter Mitral and Tricuspid Therapies
2020 Investor Conference Transcatheter Mitral and Tricuspid Therapies
Slide 52: TMTT is guided by our vision to lead and transform treatment
TMTT is guided by our vision to lead and transform treatment for patients with mitral and tricuspid valve disease To achieve this vision, TMTT is focused on 3 key value drivers Today, patients with Mitral and 1 Our portfolio of differentiated therapies Tricuspid regurgitation remain 2 Positive resul
Slide 53: TMTT is innovating a broad transcatheter portfolio
TMTT is innovating a broad transcatheter portfolio TRICUSPID MITRAL Leaflet Repair PASCAL PASCAL Ace PASCAL PASCAL Ace Annular Reduction Cardioband Cardioband Valve Replacement EVOQUE SAPIEN M3 EVOQUE CAUTION: INVESTIGATIONAL DEVICE. Limited to Investigational Use Only. 12/10/2020 3
Slide 54: Mitral Innovations: PASCAL for Leaflet Repair
Mitral Innovations: PASCAL for Leaflet Repair PASCAL Ace CE Marked in 2020 PASCAL PASCAL Ace New implant with narrower profile and spacer to achieve optimal outcomes for more patients PASCAL & PASCAL Ace share differentiated features A nitinol design to A central spacer to The ability to elongate In
Slide 55: High rates of MR reduction are achieved with PASCAL
High rates of MR reduction are achieved with PASCAL, starting from physicians’ earliest experience CLASP IID Roll-In Data CLASP CE Mark Study Real-World Experience 73% 82% 83% Percentage of patients with Percentage of patients with Percentage of patients with MR ≤0/1+ at 30 days 1 MR ≤0/1+ at 1 year
Slide 56: Mitral Innovations: Two-platform strategy for transfemoral replacement
Mitral Innovations: Two-platform strategy positions TMTT for transfemoral replacement leadership SAPIEN M3 “The strength of the Edwards mitral Leverages the Both transfemoral program is the diverse proven SAPIEN delivery systems are portfolio… valve, coupled with a to be able to treat a wide <30F no
Slide 57: Innovations & Evidence In Tricuspid Repair
Innovations & Evidence In Tricuspid Repair PASCAL: CLASP TR EFS Study Cardioband: Tri-Repair CE Mark Study PASCAL Differentiated leaflet 70% 72% repair leverages Percentage of patients with Percentage of patients with mitral platform ≥ 2 TR grade reduction1 TR ≤ moderate at 30 days2 Cardioband Stron
Slide 58: Innovations & Evidence In Tricuspid Valve Replacement
Innovations & Evidence In Tricuspid Valve Replacement EVOQUE Compassionate Use EVOQUE 88% “Having all of these Percentage of patients with options simultaneously Tricuspid platform TR ≤0/1+ at 30 days1 in your toolbox expands with three valve sizes dramatically the to address diverse number of patie
Slide 59: A dedicated team executing our high touch model
A dedicated team of talented people executing our high touch model to deliver outstanding patient outcomes The TMTT high touch model • Commitment to initial and ongoing physician training • Highly trained clinical specialists providing full case coverage and support Transforming treatment for patien
Slide 60: What to expect from TMTT in 2021
What to expect from TMTT in 2021 Additional Clinical TMTT Revenue Innovations Evidence Continued innovations on Expanding our body of Doubling TMTT revenue each platform clinical evidence, including: led by PASCAL and PASCAL Ace for both Initial clinical experience • Continued enrollment in mitral a
Slide 61: 2021 Global Sales Outlook
2021 Global Sales Outlook Headwinds Tailwinds Increasing awareness of PASCAL/PASCAL Ace leading to: Doubling Slower adoption of 2020 to PASCAL differentiation driving novel TMTT therapies ~$80M faster site activation in Europe Competition for Rapid enrollment in CLASP IID clinical trial enrollment t
Slide 62: Executive Summary
Executive Summary • Patients with Mitral and Tricuspid regurgitation remain undertreated and suffer from poor quality of life • TMTT is delivering a portfolio of therapies, backed by clinical evidence, to address the diversity and complexity of Mitral and Tricuspid disease • Doubling revenue in 2021
Slide 63: For professional use: investigational devices
For professional use. For a listing of indications, contraindications, warnings, precautions and adverse events, please refer to the Instructions for Use (consult eifu.edwards.com where applicable). Edwards devices placed on the European market meeting the essential requirements referred to in Artic
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Slide 65: Critical Care
2020 Investor Conference Critical Care
Slide 66: Critical Care improving the quality of care for patients
Critical Care improving the quality of care for patients • Continuing to shift product mix towards Smart Recovery, which has highest growth potential of our product groups • Focusing on three key building blocks to advance Smart Recovery patient penetration from 5% to 15% by 2026 • Deploying right t
Slide 67: We are shifting focus of business to Smart Recovery
We are shifting focus of business to Smart Recovery Will become largest part of our portfolio • Will shift mix towards Smart Recovery, which has highest growth potential • This will lead to Smart Recovery Growth Potential Smart Monitoring becoming largest part of our 20% portfolio • Core monitoring
Slide 68: Three Key Building Blocks for Smart Recovery
Three Key Building Blocks for Smart Recovery 2026 15% penetration 2.7M patients AWARENESS Today 18M patients EVIDENCE could benefit from Smart Recovery 5% penetration TECHNOLOGY 700k patients 14M patients could benefit from Smart Recovery 12/10/2020 4
Slide 69: Having the Right Technologies Deployed in Hospitals
Having the Right Technologies Deployed in Hospitals CAPITAL PLATFORM SENSORS SOFTWARE Hypotension FORE SIGHT Prediction 94 Index (HPI) Acumen IQ Sensor ForeSight Viewfinder HemoSphere Remote View Acumen IQ Cuff Long-term growth can only be accomplished if we have our advanced monitoring platform in
Slide 70: Generating Compelling Clinical Evidence
Generating Compelling Clinical Evidence Intraoperative Hypotension (IOH) Matters Edwards HPI Software Can Reduce IOH without Acumen HPI software with Acumen HPI software Both studies demonstrate IOH linked to: Acute kidney Myocardial 30-day 33 mins injury injury mortality HYPE Trial 76% Decrease in
Slide 71: Creating Awareness for our Products Through Evidence
Creating Awareness for our Products Through Evidence “HPI was high…and 10 minutes later there was hypotension. I didn’t see it coming at all.” – Simon Davies, MD MBChB FRCA “We were able to decrease the rate of hypotension by about 50%, which is quite impressive I think.” – Michael Sander, MD, PhD “
Slide 72: 2021 Global Sales Outlook
2021 Global Sales Outlook Headwinds Tailwinds $800M Reduction in elective Non-cardiac elective procedures $725M procedures rebound Hospital capital budget Impact of clinical constraints evidence on adoption 2021E Critical Care Estimated Global Sales 12/10/2020 8
Slide 73: Executive Summary
Executive Summary • Shift product mix towards higher growth Smart Recovery • Advance Smart Recovery penetration from 5% to 15% • Implement building blocks: technology, evidence, awareness 12/10/2020 9
Slide 74: For Professional Use caution notice
For Professional Use. CAUTION: Federal (United States) law restricts these devices to sale by or on the order of a physician. See instructions for use for full prescribing information, including indications, contraindications, warnings, precautions and adverse events. Edwards Lifesciences devices pl
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Slide 76: Financial Outlook
Financial Outlook Scott Ullem Chief Financial Officer
Slide 77: Edwards has delivered strong financial performance
Edwards has delivered strong financial performance STRONG SALES GROWTH EXCEEDING MEDTECH SECTOR ROBUST CASH FLOW Long-Term HEALTHY GROSS AND DISCIPLINED PROFIT AND CAPITAL Shareholder OPERATING DEPLOYMENT Returns MARGINS 12/10/2020 2
Slide 78: Edwards Financial Objectives
Edwards Financial Objectives STRONG SALES GROWTH EXCEEDING MEDTECH SECTOR • Sales growth fueled by successful long-term investments in R&D and advancements of breakthrough innovations Long-Term Shareholder • Sustained leadership position Returns supported by strong evidence base of value to patients
Slide 79: COVID significantly impacted 2020 financial performance
COVID significantly impacted 2020 financial performance (Excludes special items; $ in millions except earnings per share) Adjusted Item 2019 Investor Conference October Guidance Year-over-year growth Sales $4,500-5,000 below plan FX Impact on Sales ~$(40) Neutral impact (~1% downside to sales) Gross
Slide 80: 2020 Sales Guidance Comparison
2020 Sales Guidance Comparison Total company year-over-year Q4 growth rate trending lower than Q3 due to COVID 2019 Investor Conference Current Guidance Transcatheter Aortic Valve Higher End 12-15% (5%)-5% Replacement Transcatheter Mitral & Tricuspid $50-$70M Around $40M Therapies Surgical Structura
Slide 81: Mid-teens sales growth expected in 2021
Mid-teens sales growth expected in 2021 (Adjusted sales $ in billions; underlying growth rates) 2021 EXPECTATIONS • Hospitals continue to face headwinds from COVID Mid- teens • Growth in all regions with 15% expectations for interruptions 10% due to COVID 16% 18% $4.9-5.3 • FX impact expected to be
Slide 82: 2021 Sales Guidance – Product Group
2021 Sales Guidance – Product Group ($ in millions at current exchange rates) Underlying Sales Transcatheter Aortic Valve Replacement $3,200-3,600 (Underlying growth 15-20%) Transcatheter Mitral & Tricuspid Therapies ~$80 (Approximately 2x 2020) Surgical Structural Heart $800-900 Critical Care $725-
Slide 83: 2021 Guidance Assumptions
2021 Guidance Assumptions • COVID continues to stress the global healthcare system • COVID impact lessens after winter flu season • Effective vaccine becomes widely available by mid-2021 • Hospitals continue to improve ability to treat structural heart patients 12/10/2020 8
Slide 84: TAVR to return to double-digit sales growth in 2021
TAVR to return to double-digit sales growth in 2021 (Adjusted sales $ in millions; underlying growth rates) 2021 HIGHLIGHTS • Procedure growth driven by improved TAVR adoption • EARLY TAVR enrollment 15-20% Higher end complete (5%) - 5% 21% • FDA approval to start Moderate AS pivotal trial 12% 24% $
Slide 85: TMTT has strong momentum going into 2021
TMTT has strong momentum going into 2021 (Adjusted sales $ in millions) 2021 HIGHLIGHTS • Doubling 2020 global revenue led by PASCAL and PASCAL Ace for both mitral and tricuspid patients • Enrolling 5 pivotal studies: SAPIEN M3 (ENCIRCLE); EVOQUE TR (TRISCEND II); ~$80 and PASCAL (CLASP IID, IID, an
Slide 86: Surgical Structural Heart brings leading innovation
Surgical Structural Heart brings leading innovation (Adjusted sales $ in millions; underlying growth rates) 2021 HIGHLIGHTS • Drive adoption of our RESILIA products, INSPIRIS and KONECT • INSPIRIS China launch (15%) – (5%) 3% 2% 4% • MITRIS US and Japan launch (2%)* • HARPOON U.S. pivotal trial enro
Slide 87: Critical Care shifting focus to Smart Recovery
Critical Care shifting focus to Smart Recovery (Adjusted sales $ in millions; underlying growth rates) 2021 HIGHLIGHTS • Drive growth with capital equipment and Smart Recovery products (5%) – 0% • Focus on advancing Smart 9% 11% Recovery and improving 8% quality of care with the 5% expansion of HPI
Slide 88: 2021 Product Group Milestones
2021 Product Group Milestones TAVR TMTT • Procedure growth driven by improved TAVR adoption • Double 2020 global revenue led by PASCAL and PASCAL Ace for both mitral and tricuspid patients • EARLY TAVR enrollment complete • Enrolling 5 pivotal studies • FDA approval to start Moderate AS pivotal trai
Slide 89: Edwards Financial Objectives
Edwards Financial Objectives HEALTHY PROFITABILITY • Generating strong gross profit and operating margins • Funding growing field organization and strengthening global supply Long-Term chain Shareholder Returns • Investing aggressively for profitable organic growth • Maintaining efficient tax struct
Slide 90: 2021 Gross Profit Margin Outlook
2021 Gross Profit Margin Outlook Year-over-Year Mix benefit from TAVR growth Sales Mix + Some lower-volume new product margins below the corporate average Modest price compression driven by volume discounts Creating business continuity across our global manufacturing network +/– Optimizing Increasin
Slide 91: Plan to invest aggressively in 2021 for future growth
Plan to invest aggressively in 2021 for future growth despite expected COVID disruptions R&D SG&A • TAVR and TMTT investments • Continuing to support high-touch focused on developing new model for U.S. TAVR technologies and generating evidence to expand indications • Ongoing build-out of commercial
Slide 92: Operating performance drives adjusted EPS growth
Operating performance drives adjusted EPS growth (at current rates) (at current rates) 12/10/2020 17
Slide 93: Edwards Financial Objectives
Edwards Financial Objectives ROBUST CASH FLOW AND DISCIPLINED CAPITAL DEPLOYMENT • Enables aggressive R&D investments • Internal growth supplemented by smaller strategic acquisitions Long-Term Shareholder • Investing in expanding global Returns capacity • Commitment to returning capital to sharehold
Slide 94: Cash Flows and Capital Deployment
Cash Flows and Capital Deployment 2016 - 2019 2021 HIGHLIGHTS • Continued growth results in significant cash flows that fund $2.5B future internal and external Share Repurchases opportunities Nearly $4B funded $0.8B CAPEX • 2021 capital expenditures expected around $350 million as capacity expansion
Slide 95: 2021 Guidance Summary
2021 Guidance Summary (Excludes special items; $ and shares in millions except earnings per share) Adjusted Item FY 2021 Adjusted Item FY 2021 Sales $4,900-5,300 Operating Margin 29-30% Underlying growth Mid-teens Tax rate 11-15% (~5pp ETB benefit) FX Impact on Sales ~$35 Earnings Per Share $2.00-$2
Slide 96: Longer-Term Guidance
Longer-Term Guidance Underlying Sales Growth Innovation expected to drive organic growth that exceeds medtech sector Gross Margin Mix and efficiencies expected to benefit longer-term margin Significant investments in clinical trials to expand indications and develop new R&D % of Sales technologies D
Slide 97: Edwards Financial Objectives
Edwards Financial Objectives Long-Term Shareholder Returns 12/10/2020 22
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Slide 99: Closing Remarks
Closing Remarks Michael A. Mussallem Chairman and CEO
Slide 100: Patient-Focused Innovation Strategy
Patient-Focused Innovation Strategy Focus Singular focus on the large unmet needs of structural heart and critically ill patients Create Leadership Meaningful Innovation Value by Lead groundbreaking Pioneer breakthrough Transforming standards of care through technologies with Patient Care trusted re
Slide 101: 2021 expected to be a year of significant growth and investment in our future
2021 expected to be a year of significant growth and investment in our future 2021 Expectations Mid-teens $2.00 - $2.20 Underlying net Adjusted sales growth EPS TAVR Surgical • Therapy expansion • Surgeon partnership • Technology advances • Leading pipeline • Geographic expansion • Growth segment fo
Slide 102: Edwards' Board is diverse and accomplished
Edwards’ Board is diverse and accomplished • Leading governance practices Michael A. Mussallem Kieran T. Gallahue Leslie S. Heisz • Proactive shareholder engagement • Performance-based compensation philosophy Paul A. LaViolette William J. Link Ph.D. Steven R. Loranger based on: ˗ Financial performan
Slide 103: Edwards is committed to good corporate citizenship
Edwards is committed to good corporate citizenship Forbes | JUST Capital 2020 America’s 2021 America’s Most Most Responsible JUST Companies Companies 2020 World’s Most Ethical Companies Investor’s Business Daily America’s Best 2019 Management 50 Best ESG Large Employers Top 250 America’s Best Large
Slide 104: Edwards is committed to giving back
Edwards is committed to giving back EVERY HEARTBEAT MATTERS COVID-19 RESPONSE Launched new goal to improve lives Edwards Lifesciences Foundation of 2.5M additional underserved issued emergency grants to more than structural heart and critically ill 20 partner organizations patients by the end of 202
Slide 105: Edwards is poised for long-term value creation
Edwards is poised for long-term value creation Patient-Focused Culture motivates and guides our global team Sustainable Growth Large Populations organic revenue of under-served patients Innovative R&D Credibility and Trust produces breakthrough with clinicians, regulators, therapies and drives payor
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Slide 107: Forward-looking statements and disclaimers
2020 Investor Conference Forward-looking statements and disclaimers
Slide 108: Cautionary Statement
Cautionary Statement This video presentation includes 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. These forward-looking statements can sometimes be identified by the use of words such as “may,” “wi
Slide 109: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Unless otherwise indicated, all figures are GAAP financial measures The Company uses the term "adjusted sales" or “underlying growth rate” when referring to non-GAAP sales information, which excludes foreign exchange rate fluctuations, the conversion to a consi
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Slide 111: Non-GAAP Financial Information
EDWARDS LIFESCIENCES CORPORATION Non-GAAP Financial Information To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company uses non-GAAP historical financial measures. Management makes adjustments to the GAAP measures f
Slide 112: Adjusted Free Cash Flow
Adjusted Free Cash Flow - The Company defines free cash flow as cash flows from operating activities less capital expenditures. During 2019, the Company excluded from its calculation payments related to a litigation settlement, net of the associated tax benefit. During 2018, the Company excluded fro
Slide 113: Reconciliation of GAAP to Adjusted Net Income and Diluted EPS
Unaudited Reconciliation of GAAP to Non-GAAP Financial Information Twelve months ended December 31 (in millions, except per share and percentage data) RECONCILIATION OF GAAP TO ADJUSTED NET INCOME 2019 GAAP Net Income $1,046.9 Non-GAAP adjustments: TAVR inventory write-off 73.1 Intellectual property
Slide 114: Reconciliation of Adjusted Free Cash Flow
EDWARDS LIFESCIENCES CORPORATION Reconciliation of GAAP to Non-GAAP Financial Information Adjusted Free Cash Flow * Year Ended December 31, (in millions) 2019 2018 2017 2016 Net cash provided by operating activities $1,179.4 $926.8 $1,000.7 $704.4 Capital expenditures (254.4) (238.7) (168.1) (176.1)
Slide 115: Reconciliation of Sales by Product Group and Region 2019
EDWARDS LIFESCIENCES CORPORATION Unaudited Reconciliation of Sales by Product Group and Region ($ in millions) 2019 Adjusted 2018 Adjusted GAAP Surgical 2018 Growth 2019 Adjusted CASMED Consignment Germany Adjusted Underlying Sales by Product Group (YTD) 2019 2018 Change Rate* Sales Acquisition Conv
Slide 116: Reconciliation of Sales by Product Group and Region 2018
EDWARDS LIFESCIENCES CORPORATION Unaudited Reconciliation of Sales by Product Group and Region ($ in millions) 2018 Adjusted 2017 Adjusted GAAP Surgical 2018 2017 Growth Consignment Germany Adjusted Germany Adjusted Underlying Sales by Product Group (YTD) 2018 2017 Change Rate* Conversion Stocking S
Slide 117: Reconciliation of Sales by Product Group and Region 2017
EDWARDS LIFESCIENCES CORPORATION Unaudited Reconciliation of Sales by Product Group and Region ($ in millions) 2017 Adjusted 2016 Adjusted GAAP 2017 Growth Germany Adjusted Sales Return 2016 Underlying Sales by Product Group (YTD) 2017 2016 Change Rate* Stocking Sales Reserve FX Impact Adjusted Sale
Slide 118: Reconciliation of Sales by Product Group 2016
EDWARDS LIFESCIENCES CORPORATION Unaudited Reconciliation of Sales by Product Group ($ in millions) 2016 Adjusted 2015 Adjusted GAAP Growth Sales Returns 2016 Sales Returns 2015 Underlying Sales by Product Group (YTD) 2016 2015 Change Rate* Reserve Adjusted Sales Reserve FX Impact Adjusted Sales Gro