Livanova Plc · NASDAQ:LIVN
Livanova — Investor Day (September 2017)
17 slides from Livanova's investor day presentation, Sep 14, 2017
Slide 1: LivaNova Investor Day: Financial Outlook
NEUROMODULATION LivaNova Investor Day Heart Valves Financial Outlook Thad Huston Chief Financial Officer September 14, 2017 CARDIAC SURGERY
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 19
Slide 3: First-half 2017: measurable growth across the company
First-half 2017: measurable growth across the company Strong earnings performance based on Solid cadence of expanding margins, Executing on integration customer-centric new disciplined spending and of Caisson acquisition product innovation focused R&D Improved in-channel On track to meet $80M invent
Slide 4: Improving margins and delivering on our commitments
Improving margins and delivering on our 1H16 1H17 commitments +1.0% on $1.72 constant- currency basis 65.8% $608M $607M 64.8% $1.41 19.6% 17.5% Net sales Adjusted gross margin* Adjusted operating Adjusted EPS* margin* * Gross margin, operating margin and diluted EPS are adjusted non-GAAP measures 4
Slide 5: Building a strong future through top line growth
Building a strong future through top line growth 2017-2022 CAGR Mid- Mid- to High- single-digit high- single-digit single-digit M&A SPI* Neuromodulation High-single-digit Cardiac Surgery Low-single-digit 2017E 2022E SPI = Strategic Portfolio Initiatives, which include Transcatheter Mitral Valve Repl
Slide 6: Expanding our gross margins
Expanding our gross margins Gross margin* as a percentage of revenues 70%+ Mid 60% 2017E Price Lean Business SKU Inflation / FX 2022E Manufacturing Mix Rationalization * Gross margin is an adjusted non-GAAP measure 6
Slide 7: Executing on initiatives to drive profitability
Executing on initiatives to drive profitability Direct Central purchasing aligned by common strategy 1 across functions procurement Identify and replicate best practices, apply strict 2 Lean manufacturing performance management COGS Streamlining product portfolio and focusing on 3 SKU rationalizatio
Slide 8: Invest in R&D today to drive growth tomorrow
Invest in R&D today to drive growth tomorrow R&D* as a percentage of revenues 12-13% 11-12% • In 2016/2017, prior to 10-11% Caisson acquisition, R&D* expense was 9-11% of net sales • R&D profile will increase mid- term to support investment in portfolio expansion • Expanding margins enable longer-te
Slide 9: Expanding operating margins
Expanding operating margins Operating income* as percentage of revenues 20%+ Gross margin expansion High- teens SG&A reduction R&D investment 2017E 2022E * Operating Income is an adjusted non-GAAP measure 9
Slide 10: Projecting strong growth in earnings per share
Projecting strong growth in earnings per share 2017 - 2022 CAGR Low- to EPS* mid-teens * EPS is an adjusted non-GAAP measure 10
Slide 11: Focused capital allocation strategy
Focused capital allocation strategy PRIORITIES Organic growth Liquidity to support the strategy Investment Capital enhancements Capital structure that adapts to business needs Focused M&A on core competencies Operating CF Drive increased shareholder returns Share repurchase program Target leverage*
Slide 12: Delivering strong free cash flow growth
Delivering strong free cash flow* growth Net income is a key driver of growth Improving cash conversion ~$225M to $275M Working capital improvements contribute to FCF through 2022 Future growth will support M&A 2017E 2022E * Free cash flow is an adjusted non-GAAP measure 12
Slide 13: M&A strategy targets growth and margin expansion
M&A strategy targets growth and margin expansion TMVR & HF: High- mainly growth single- potential HF digit TMVR Neuromodulation: Growth Mid- margin and growth NM potential single- digit Cardiac Surgery: Low- mainly margin CS single- expansion digit Profitability improvement Illustrative only and not
Slide 14: Driving shareholder value creation
Driving shareholder value creation • Large, globally expanding markets REVENUE Mid- to high- • Broad geographic presence GROWTH single-digit CAGR • Accelerating growth through execution, innovation and M&A • Executing initiatives to improve profitability EPS Low- to mid- • R&D investments drive futu
Slide 15: LivaNova: Health innovation that matters
LivaNova | ivaNova Health innovation that matters 15
Slide 16: Appendix: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) * Numbers may not add up precisely due to rounding 16
Slide 17: Appendix: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) * Numbers may not add up precisely due to rounding 17