Enovis Corporation · NYSE:ENOV
Enovis — Colfax — Investor Presentation (March 2022)
60 slides from Enovis's investor presentation, Mar 14, 2022
Slide 1: Enovis: An Innovation Driven Medical Technology Company
March 14, 2022 Investor Presentation Enovis: An Innovation Driven Medical Technology Company Exhibit 99.1
Slide 2: Forward Looking Statement and Non-GAAP Disclaimer
Forward Looking Statement and Non-GAAP Disclaimer This document has been prepared by Colfax Corporation, a Delaware corporation (“Colfax”), solely for informational purposes. Upon completion of the intended separation of Colfax’s fabrication technology and specialty medical technology businesses (th
Slide 3: Presenters Today
Matt Trerotola CEO Brady Shirley President & COO Chris Hix EVP & CFO Presenters Today
Slide 4: MedTech Growth Company Positioned for Significant Value Creation
Foundation in attractive orthopedic market with room for expansion Experienced leadership team leveraging proven business system Clear strategy and momentum for HSD organic growth fueled by innovation Significant margin improvement path through mix, productivity, and scale Many acquisition vectors a
Slide 5: Introduction to Enovis
Introduction to Enovis
Slide 6: Who is Enovis?
Enovis™ is a medical technology company focused on developing clinically differentiated solutions that generate measurably better patient outcomes and transform workflows. Powered by a culture of continuous improvement, extraordinary talent and innovation, we ‘create better together’ by partnering w
Slide 7: Strong Global Positions in Attractive Segments
Strong Global Positions in Attractive Segments PF sales for full-year revenue contribution from Mathys, Trilliant, and MedShape acquisitions. PF aEBITDA for full-year aEBITDA contribution from Mathys, Trilliant and MedShape and 2021 legacy Colfax corporate costs allocated to Enovis on an on-going ba
Slide 8: Addressing Large, Attractive Ortho Market
Source: Orthoworld 2021 Orthopedic Industry Annual Report, public company filings, Wall Street research, Forbes. Surgical Implants and Instrumentation Prevention & Rehabilitation (P&R) Market CAGR 3-4% 7-8% 3-4% 6-7% 2-3% ~4% 9 8 3 7 10 6 5 Trauma Spine Our Recon served markets $B $48B Enovis compet
Slide 9: Uniquely Positioned Across Full Ortho Care Continuum
PREVENTION Off-loading braces Back braces Cold therapy SURGICAL Shoulders Knees Hips Foot/Ankle RECOVERY Post-op braces Walker boots Cold therapy PERFORMANCE Athletic braces Muscle stimulation REHAB Electrotherapy Laser therapy Heat/cold therapy Traction devices PREVENTION REPAIR RECOVERY Brand leve
Slide 10: Scaled and Agile in Fragmented Industry
Source: Orthoworld 2021 Orthopedic Industry Annual Report, public company filings, Wall Street research, Forbes. 2021 revenue, as reported. Enovis is positioned for share gain, scale, and expansion Competitive Ortho Landscape Big, broad majors Scaled, differentiated players Focused innovators Big en
Slide 11: Clear Strategy for Shareholder Value Creation
~20% aEBITDA Margin $2B+ Annual Sales HSD Organic Revenue Growth Strategic Opportunities 3-Year Goals Compounding value creation from growth, margins, and investment ü Shaping P&R platform for sustained MSD growth ü Rapidly expanding high-margin, DD growth Recon platform ü Expanding margins with a c
Slide 12: Realizing Our Vision – High-Value MedTech Growth Company
See Appendix for reconciliation of pro forma sales. Enovis Sales Performance & Goals Improve and shape P&R Aggressively grow and expand Recon Enter adjacent high-growth segments Extend P&R leadership Scale Recon 1 Clear path to $2B and beyond with HSD organic growth and expanded margin profile Reali
Slide 13: Strong Leadership Team, Deep MedTech Experience
Joining Board upon consummation of separation. Mitch Rales Matt Trerotola Brady Shirley1 Barbara Bodem1 Liam Kelly Angie Lalor1 Phil Okala Christine Ortiz1 Clay Perfall Rajiv Vinnakota Sharon Wienbar Chairman, Colfax, Danaher Co-Founder CEO President & COO Former SVP & CFO of Hillrom CEO of Teleflex
Slide 14: Our Proven, Powerful Business System, EGX
EGX supporting growth acceleration and margin improvement Our Enovis Growth eXcellence business system is a set of tools, processes, and culture, incorporating continuous improvement to drive and fuel growth Drive Growth Fuel Growth Talent and Culture Our Proven, Powerful Business System, EGX
Slide 15: Harnessing the Power of Our Talent with Purpose, Values, Processes
Enovis commitment to developing our talent fuels our success Actionable annual engagement survey with 90%+ participation and overall scores in top quartile Enterprise-wide focus on diversity and inclusion Powerful combination of DJO & Colfax High performance culture 63% increase in training and deve
Slide 16: Business System Proven to Drive Significant Long-Term Value
Note: Refer to Appendix for non-GAAP reconciliations. Enovis EGX journey has strong momentum using tools that had big impact at ESAB Above Market Organic Growth Productivity Foundation For Further Margin Expansion Lean Supply Chain: Safety, Delivery, Productivity Agile Growth: Innovation cadence, Co
Slide 17: Enovis Evolution to HSD Organic Growth Underway
See Appendix for reconciliation of sales pro forma for full-year revenue contribution from Mathys, Trilliant, and MedShape. 2018 2021 Recon P&R $1.5B $1.2B Ortho Market Growth Scaling top line growth and outperforming the market in Recon and P&R Recon P&R Operational improvements Investments in DD r
Slide 18: On Track for HSD Organic Growth
Note: Current revenue contribution is pro-forma for full-year revenue contribution from Mathys, Trilliant, and MedShape. Current Revenue Contribution 2022+ Expected Revenue Growth Recon 32% @ 10 - 15% P&R 68% @ 4 - 5% MSD+ ð HSD Organic Revenue Growth Demonstrated DD recon growth and P&R at/above ma
Slide 19: Focused Growth Strategies
Focused Growth Strategies ae
Slide 20: Focused Growth Strategies
Focused Growth Strategies Rapidly expanding high-margin, DD growth Recon platform Tremendous opportunities to drive strong and profitable growth Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Expanding margins with a clear strategy and EGX Accelerating growth
Slide 21: Focused Growth Strategies
Focused Growth Strategies Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Expanding margins with a clear strategy and EGX Accelerating growth through technology investments and acquisitions 1 2C 3 4 Building Foot & Ankle business with near-term pathway to $100m
Slide 22: Market Leader in Prevention & Recovery with Differentiated Brands
Market Leader in Prevention & Recovery with Differentiated Brands Source: Based on internal Enovis analysis. P&R Sales & Market Position1 Market Leadership Technology and Brand Leadership $5B market expected to grow 3-4% per year Industry-defining products across Orthopedics Leader in fast growing S
Slide 23: Prevention and Recovery Markets with Steady MSD Growth
Prevention and Recovery Markets with Steady MSD Growth Source: Internal management estimates and SmartTrak (by BioMedGPS, LLC) projections for procedure growth in 2023 and beyond. Key Demand Drivers Segment Growth in Procedure Volume1 JOINT RECONSTRUCTION SPORTS MEDICINE TRAUMA AND INJURY Osteoarthr
Slide 24: P&R Sales Growth Restored to Above Market
P&R Sales Growth Restored to Above Market Adjusted for constant currency, excludes acquisition and discontinued business lines. 2022 Guidance: MSD Sales Growth Historical Organic Sales Growth1 2019 Above market Poor service Low vitality SKU rationalization Re-establishing customer service levels Inc
Slide 25: Increased Innovation Driving Core Growth and Accelerating Key Strategies
Increased Innovation Driving Core Growth and Accelerating Key Strategies Vitality defined as new product revenue (introduced in last 3 years) as a percentage of total revenue. Does not include P&R class 3 bone stimulation revenues. Progress and pipeline innovation to drive quickly to 20%+ vitality g
Slide 26: Leading in Digital Healthcare with MotionMD
Leading in Digital Healthcare with MotionMD® Products transacted through MotionMD in clinics. 1 A purpose-built SaaS platform creates stickiness and enables share gain SaaS Workflow Automation Software Solution Clinic Location Growth 45% share in US clinics / used by over 30K med professionals Key d
Slide 27: Pioneering Connected Medicine with MotioniQ
Pioneering Connected Medicine with MotioniQ™ Enable doctors and patients to virtually walk side-by-side throughout the care continuum Ultimate Wearable Technology SmartBrace™ transforming “in-protocol” brace into wearable technology Enables Post-Op remote patient monitoring across patient journey Op
Slide 28: Focused Growth Strategies
Focused Growth Strategies Shaping P&R platform for sustained MSD growth Expanding margins with a clear strategy and EGX Accelerating growth through technology investments and acquisitions 1 3 4 Rapidly expanding high-margin, DD growth Recon platform Globalizing and expanding recon platform 2C Buildi
Slide 29: Attractive Reconstructive Segment & Market Position
Attractive Reconstructive Segment & Market Position Source: Based on internal Enovis analysis. 2021 sales pro forma for recent acquisitions (annualized impact vs partial year 2021 sales). 2 ~$0.5B2 Enovis ‘21 Sales Revenue Split and Market Growth1 $20B market segments; Enovis WAMGR of 5-6% Other Ext
Slide 30: Fast-Growing Recon Business with Proven Playbook
Fast-Growing Recon Business with Proven Playbook 2A 2X market growth led by Altivate Reverse and accelerating Altivate Edge anatomic stemless Proven MatchPoint® pre-operative plan and PSI system in 35%+ of procedures Track record of sustained strong DD growth across segments 5X+ market growth powere
Slide 31: Measurably Better Demonstrated Outcomes
Measurably Better Demonstrated Outcomes… 2A ALTIVATE Reverse: Breakthrough in range of motion “Glenoid lateralization and inferiorization, as well as a 135o shaft angle,…are the best options to improve impingement free range of motion, to limit notching, and are not harmful for long-term longevity.”
Slide 32: Leading Innovation Cadence Driving Rapid Adoption
Leading Innovation Cadence Driving Rapid Adoption 2A ~65% ~75% Expansion in product bag penetration Market-Leading Innovation Cadence +23% New surgeons ($100K+) 30%+ Sustained vitality Improvement Since 2018 Significant whitespace to continue executing strategy Breadth in key Shoulder franchise Exte
Slide 33: Winning in High Growth ASC Segment
Winning in High Growth ASC Segment Source: Based on internal Enovis analysis. 2A % of DJO Surgical Knee Revenue in ASC Rapid Expansion of Empowr® Knee in ASC Drivers of ASC Growth Enovis Advantage Medicare / Medicaid rule change 1/1/2020 Shrinking physician fee coverage by CMS à fueling physician in
Slide 34: Targeted Computer Assisted Surgery (CAS) Strategy
Targeted Computer Assisted Surgery (CAS) Strategy 2A Enovis CAS technologies will provide a flexible and scalable approach Match Point™ System used in ~30% of Enovis shoulder cases Anatomically distinct Spanning entire workflow Platform purpose-built for ASC Suite of offerings uniquely tooled to eac
Slide 35: Strong Positions in Attractive Foot and Ankle Market
Strong Positions in Attractive Foot and Ankle Market Note: Number of procedures based on US surgical activity. 2B Integration on track, momentum accelerating Complex anatomy with many niche procedures Demographics and favorable reimbursement powering HSD growth Innovation improving outcomes by lever
Slide 36: Clear Strategy to Grow, Expand, and Scale in Foot and Ankle
Clear Strategy to Grow, Expand, and Scale in Foot and Ankle 2B Key contributor to Recon DD growth 1 Building strong dedicated channel 2 Developing and acquiring differentiated products for other high-growth procedures 3 Modernizing STAR™ and expanding ankle portfolio 4 Globalize through Mathys Execu
Slide 37: Globalization of Recon Through Mathys Acquisition
Globalization of Recon Through Mathys Acquisition US Hip/Knee/Shoulder market per Orthoworld 2021 Orthopedic Industry Annual Report. Not including Foot & Ankle ($3B globally). 2C Mathys acquisition nearly doubles addressable market and expands portfolio Pre-Acquisition Pro-Forma Reflecting Acquisiti
Slide 38: Realizing the Strategic Benefits from Mathys Acquisition
Realizing the Strategic Benefits from Mathys Acquisition 2C Complementary markets and technologies enable growth acceleration and margin improvement CROSS-SELL LEADING TECHNOLOGIES GLOBALIZE INNOVATION DRIVE PRODUCTIVITY Goals Strategic Pillar Expand Mathys Shoulder with Altivate® Reverse Strengthen
Slide 39: Recon Double-Digit Organic Growth Projection
Recon Double-Digit Organic Growth Projection Source: Orthoworld 2021 Orthopedic Industry Annual Report. 2 1 % of Recon Market Growth1 Projected Growth vs. Market 2022+ Growth Projection US Shoulder ~30% 7-8% ~2x 12 – 15% US Hip / Knee ~30% 3-4% 3-5x 10 – 15% Foot / Ankle ~10% 6-7% 2-3x 15 – 18% Int’
Slide 40: Focused Growth Strategies
Focused Growth Strategies Expanding margins with a clear strategy and EGX 3 Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Accelerating growth through technology investments and acquisitions 1 2C 4 Building Foot & Ankle business with near-term pathway to $100m
Slide 41: Clear Short-Term Path to 20% aEBITDA Margins
Clear Short-Term Path to 20% aEBITDA Margins Note: Bridging bars from 2021 to 2024 are directional and not to scale; refer to Appendix for non-GAAP reconciliations. 2018 results are based on management’s internal reports. 3 aEBITDA Margin (%) Margin Drivers Right-size corporate costs Streamline and
Slide 42: Focused Growth Strategies
Focused Growth Strategies Accelerating growth through technology investments and acquisitions 4 Shaping P&R platform for sustained MSD growth Globalizing and expanding recon platform Expanding margins with a clear strategy and EGX 1 2C 3 Building Foot & Ankle business with near-term pathway to $100m
Slide 43: Recent Portfolio Investments Reshaping Our Business
Recent Portfolio Investments Reshaping Our Business 4 Projected 2024 Portfolio Impact >$300mm Sales Accretive Gross Margins DD+ Organic Growth Entered Foot & Ankle >$1B Market HSD growth category Fragmented competition MedShape® / Trilliant® AR Surgical Platform Next Gen total joint arthroplasty sys
Slide 44: Broad Range of Opportunities to Accelerate by Acquisition
Broad Range of Opportunities to Accelerate by Acquisition 4 Expand Geographically Fill Product Line Gaps Expand Channels Apply Technology in Other Markets Enter Logical Clinic- Based Adjacencies Expand along Continuum of Care Add Digital Solutions Build around Healthcare Provider Excel Win in the co
Slide 45: Financial Section
Financial Section
Slide 46: Strong Growth Outlook
Refer to Appendix for non-GAAP reconciliations, 2018 organic growth based on management’s internal reports. 2019 shown pro forma to include periods prior to DJO acquisition on February 22, 2019. Sales ($B) Accelerating Growth Supply chain investment and EGX improvements restored P&R growth in 2H 201
Slide 47: Forecasting Continued Market Outperformance in 2022
2022 Forecast Outperform markets with DD organic growth in Recon, healthy MSD growth in P&R Revenue follows typical seasonality + COVID recovery to deliver revenue pattern of ~47-48% in 1H (~23% in Q1) and ~52-53% in H2 (Q4 is strongest quarter) Key Assumptions Strong top-line growth in 2022 10-14%
Slide 48: aEBITDA Margin and Margin Drivers
Note: 2022 includes approximately $60mm of annual pro forma costs representing the legacy Colfax corporate costs, and $73mm for the period 2018-2021. 2019 aEBITDA margin is pro-forma for pre-acquisition results. 2018 aEBITDA margin is based on management’s internal reports. Refer to Appendix for non
Slide 49: Driving Strong Core Margin Gains in 2022
Assumes 1:3 reverse share split. Expect $2.20-$2.40 of adjusted EPS1 in FY 2022 $245-265mm aEBITDA Significant revenue growth and productivity initiatives support margin expansion COVID-driven inefficiencies and inflation begin to moderate in Q3/Q4 Corporate costs drop ~$15mm with path for additiona
Slide 50: Ample Resources to Support Growth
* Before further acquisition spending. Growing FCF ($mm) Strong Balance Sheet < $100 > $200 Growing aEBITDA Scaling CapEx Leveraging Inventory Investments Reducing EU MDR costs < 1.5x Net Leverage at separation 10% Retained Stake in ESAB to be exchanged for debt within 12 months of separation, expec
Slide 51: MedTech Growth Company Positioned for Significant Value Creation
Foundation in attractive orthopedic market with room for expansion Experienced leadership team leveraging proven business system Clear strategy and momentum for HSD organic growth fueled by innovation Significant margin improvement path through mix, productivity, and scale Many acquisition vectors a
Slide 52: Appendix
Appendix ae
Slide 53: Continuum of Care in Practice
Continuum of Care in Practice OA = Osteoarthritis. Fitted for shoulder support PREVENTION REPAIR RECOVERY 50+ Weekend Warrior with Knee OA 25+ with sports injury (shoulder fracture) 65+ patient with Ankle OA Laser Therapy Heat and Cold Therapy Fitted for off-loading brace Injections EMPOWR® Knee Rep
Slide 54: Digital Strategies Span Orthopedic Care Continuum
Digital Strategies Span Orthopedic Care Continuum Creating unique advantages today, breakthrough potential in the future Clinic / ASC Workflows Surgical Workflows Patient Workflows Multi-pronged, anatomically-specific CAS product suite PREVENTION REPAIR RECOVERY Recovery Rehab Prevention / Conservat
Slide 55: 2021 - 2019 Enovis Recon Performance vs Peers
2021 - 2019 Enovis Recon Performance vs Peers Growth on a sales per day basis. Recon Peers Avg. Relevant Growth 2021 vs 2019 Organic Growth1
Slide 56: Supplemental 2022 Guidance Information
Supplemental 2022 Guidance Information Note: Based on preliminary allocation of corporate costs, subject to audit. Depreciation expense: ~$80mm CapEx spend: $100-110mm Tax rate: Mid-20%s Share-based comp. expense ~$27mm
Slide 57: Segment-Level Performance
57 Segment-Level Performance Quarterly Sales (2019 – 2021) Segment level aEBITDA % of Sales (2021) $ millions Note: Dollars in millions. Some periods may not foot due to rounding.
Slide 58: Non-GAAP Reconciliation
58 Non-GAAP Reconciliation __________ (1) Enovis pro forma Net sales and sales components for the year ended December 31, 2019 include Medical Technology segment sales from prior to the February 22, 2019 DJO acquisition date, which are not included in Colfax's Form 10-K reports. Additionally, all Me
Slide 59: Non-GAAP Reconciliation
59 Non-GAAP Reconciliation Note: Dollars in millions. Some periods may not foot due to rounding. $ millions
Slide 60: Non-GAAP Reconciliation
60 Non-GAAP Reconciliation Note: Dollars in millions. Some periods may not foot due to rounding. __________ (1) Includes costs related to the planned separation. (2) Includes amortization of acquired intangibles and fair value charges on acquired inventory. $ millions