Slide 1: Investor Presentation Q1 2019
Investor Presentation Q1 2019 October 25, 2018
Slide 2: Presentation of financial information & forward-looking statements
Presentation of financial information & forward-looking statements Historical financial and operating data in this presentation reflect the consolidated results of ResMed Inc., its subsidiaries, and its legal entities, for the periods indicated. This presentation includes financial information prepa
Slide 3: Overview
Overview © 2018 ResMed I Q1 2019 Investor Presentation I 3
Slide 4: Who we are / what we do
Who we are / what we do • World-leading connected health company with more than 6 million cloud-connected devices ‒ More than 8 million patients in AirView monitoring ecosystem ‒ 66 million+ patient accounts in post-acute care network • Innovative designer and manufacturer of award- winning devices
Slide 5: Why invest? – driving long-term shareholder value
Why invest? – driving long-term shareholder value Market Dynamics Growth & Innovation Financial Results • Underpenetrated • Global leader in • Historical revenue and markets in sleep & connected health for profit growth COPD sleep and respiratory • Recurring revenue care • Healthcare costs • Operati
Slide 6: Growth strategy & strategic initiatives
Growth strategy & strategic initiatives Changing lives with every breath 20 million lives changed in 2020 Horizon 3 Number of Patient Lives Impacted Invest in Portfolio of Improve patient quality of life New Market Options Slow chronic disease progression • Sleep & Consumer Wellness Reduce healthcar
Slide 7: Our Business - Sleep
Our Business - Sleep © 2018 ResMed I Q1 2019 Investor Presentation I 7
Slide 8: Sleep business strategy
Sleep business strategy Our Purpose:Deliver a world-class patient experience through innovative solutions that lower overall cost for treating sleep apnea patients and improve clinical outcomes. Deliver best-in-class Embrace and enable Optimize efficiencies for providers patient experience integrate
Slide 9: What is sleep-disordered breathing?
What is sleep-disordered breathing? • Abnormal respiration during sleep – the cessation of breathing or “sleep suffocation” • Most prevalent is obstructive sleep apnea – collapse of the upper airway despite ongoing effort • Other types include central sleep apnea -- lack of breathing and lack of eff
Slide 10: Global prevalence of obstructive sleep apnea (OSA) presents opportunity
Global prevalence of obstructive sleep apnea (OSA) presents opportunity to drive increased awareness AHI ≥ 5 AHI ≥ 15 936,360,689 424,630,028 Benjafield, et al. AJRCCM 2018 (abstract) © 2018 ResMed I Q1 2019 Investor Presentation I 10
Slide 11: Sleep apnea is more than 80% undiagnosed
Sleep apnea is more than 80% undiagnosed 1 Peppard PE et al. Am J Epidemiol 2013 2 Young T et al. Sleep 1997 © 2018 ResMed I Q1 2019 Investor Presentation I 11
Slide 12: Sleep apnea is prevalent in other chronic conditions
Sleep apnea is prevalent in other chronic conditions Highly prevalent in key Stroke 62% chronic diseases Atrial Fibrillation 49% Heart Failure 76% Type 2 Diabetes Drug-Resistant Hypertension 72% 83% Morbid Obesity 77% References: Gami AS et al. Circulation 2004, O’Keefe and Patterson, Obes Surgery 2
Slide 13: Transforming the treatment & management of sleep apnea
Transforming the treatment & management of sleep apnea Quiet Compact AirSense™10 AirSense™10 AutoSet for Her AirCurve™10 Comfortable Connected AirViewTM myAir™ © 2018 ResMed I Q1 2019 Investor Presentation I 13
Slide 14: Key demographic, political, and healthcare trends present opportunities
Key demographic, political, and healthcare trends present multiple opportunities for ResMed Healthcare continues to rise in importance as a major topic on social and political agendas around the world. Increasing Chronic Aging Healthcare Costs Physician MACRO Disease Burden Population Growing Shorta
Slide 15: Working with others to raise sleep as a public priority
Working with others to raise sleep as a public priority Consumer tech joint Sleep research joint venture with Dr. Oz venture with Verily1 and Pegasus Capital World’s first non- To study the health and contact sleep tracking financial impacts of mobile app untreated sleep apnea Shows people how Based
Slide 16: Our Business - Respiratory Care
Our Business - Respiratory Care © 2018 ResMed I Q1 2019 Investor Presentation I 16
Slide 17: Respiratory care strategy
Respiratory care strategy Our Purpose: Changing the lives of COPD patients by bringing new solutions for unmet patient needs. Innovate and expand into Transform COPD Win in the core adjacent categories healthcare delivery • Reach more COPD patients • Treat patients earlier in COPD • Develop intellig
Slide 18: What is chronic obstructive pulmonary disease (COPD)?
What is chronic obstructive pulmonary disease (COPD)? COPD is a serious lung disease that over time, makes it hard to breathe The leading cause of COPD is smoking Other causes include: • second hand smoke • a history of childhood infections (could • pollution be a catalyst) • occupational exposure t
Slide 19: COPD is a large and growing market
COPD is a large and growing market • COPD is the third leading cause of death worldwide1 • More than 380 million people worldwide are estimated to have COPD2 ‒ Largely undiagnosed COPD sufferers in high-growth markets such as China, India, Brazil and E. Europe may be well over 100 million3 • Cost to
Slide 20: Opportunity to shift care from hospital to home
Opportunity to shift care from hospital to home • Healthcare costs are on the rise • Combining non-invasive ventilation (NIV) with home oxygen therapy (HOT) − Reduces hospitalization and mortality by 51% − Increases time to hospital readmission or death by ~90 days Admission-free survival by treatme
Slide 21: Full spectrum of solutions for respiratory care
Full spectrum of solutions for respiratory care High-Flow Therapy Portable Oxygen Concentrator AcuCare™ high flow Mobi™ Bilevel Ventilation Non-invasive Ventilation (NIV) Life Support Ventilation AirCurve 10 Lumis™ Stellar™ Astral™ Astral™ with RCM Patient Acuity © 2018 ResMed I Q1 2019 Investor Pre
Slide 22: Our Business - Software as a Service (SaaS)
Our Business - Software as a Service (SaaS) © 2018 ResMed I Q1 2019 Investor Presentation I 22
Slide 23: SaaS strategy
SaaS strategy Our Purpose: Revolutionize healthcare delivery through a smart connected ecosystem that drives superior outcomes for patients and providers. Portfolio expansion Build on existing platforms Platform services through M&A Drive organic growth from existing Deliver service offerings as ext
Slide 24: Solving for pain points in the physician/provider/patient ecosystem
Solving for pain points in the physician/provider/patient ecosystem Physician Provider/HME Patient Physician Evolution from Multiple systems Increased Real-time patient access to paper to increase documentation engagement meaningful electronic record potential for requirements clinical data systems
Slide 25: Full end-to-end solutions that improve clinical outcomes
ResMed has built out full end-to-end solutions that improve clinical outcomes for patients and improve business outcomes for customers. ResMed Data Exchange Following the Managing one Engaging patients workflow for patient or many to in their therapy. setting up one compliance. patient. 1 2 3 © 2018
Slide 26: History of successful SaaS acquisitions and integrations
History of successful SaaS acquisitions and integrations Company Location Date Key Product Status Halifax, NS Fully integrated as AirView Action Groups. Halifax has become AUG 2012 U-Sleep Canada key PD development center and provider of Saas Services Rebranded as GoScripts referral document managem
Slide 27: Digital Health Technology
Digital Health Technology © 2018 ResMed I Q1 2019 Investor Presentation I 27
Slide 28: Digital health technology supports all of ResMed
Digital health technology supports all of ResMed Purpose: Enable all ResMed businesses to achieve their business objectives by leveraging Healthcare Informatics technology and Advanced Analytics. Sleep Respiratory Care SaaS Digital Health Technology Technology + Advanced Analytics © 2018 ResMed I Q1
Slide 29: Digital health technology strategy
Digital health technology strategy Connected Health Ecosystem Data Analytics – The AI Journey • Innovate for core Sleep and RC business • Drive better clinical outcomes for patients and • Device connectivity to the cloud business outcomes for provider • Patient monitoring and management • Patient en
Slide 30: Leading the industry with over 3 billion nights of data in the cloud
Leading the industry with over 3 billion nights of medical sleep and respiratory care data in the cloud Global Leader in Cloud-Connected Medical Devices 3rd Party Diagnostics DIAGNOSIS THERAPY MONITORING & MGMT. PATIENT ENGAGEMENT BILLING & INTEGRATIONS © 2018 ResMed I Q1 2019 Investor Presentation
Slide 31: Global leadership in connected health
Global leadership in connected health AirView™ has over 6 million+ patients 8 million+ patients monitored at home with connected care 650,000+ diagnostic tests ResMed has 66 million+ processed in the cloud patient accounts as part of its post-acute care network 80 API calls per second 1.5 million+ p
Slide 32: Market-leading connected health solutions
Market-leading connected health solutions Pioneering innovations and providing clinical evidence that support better patient outcomes and improved business efficiencies for customers Labor 59% World’s largest study for adherence 21% Costs2 > 128,000 patients patient adherence with automated New 24%
Slide 33: Improving adherence to therapy
Improving adherence to therapy ResAdhere: remote monitoring + mask resupply drive improved adherence In a study of ~100k patients with AirView cloud-connected devices… 100 100% Probability on Therapy (%) 84% 66% 0 Resupply group (AirView + Brightree) 90 360 Control group (non-resupply) Time to Drop
Slide 34: Big data analysis drives insights for treatment of central sleep apnea
Big data analysis drives insights for treatment of central sleep apnea Patients with treatment-emergent central sleep apnea (CSA) are two times more likely to terminate therapy • Opportunity to rethink conventional therapeutic options • Minimize risk of therapy termination through early diagnosis •
Slide 35: Financial Results
Financial Results © 2018 ResMed I Q1 2019 Investor Presentation I 35
Slide 36: Key financial results
Key financial results Q1 2019 $588.3M Revenue +12% (+13% CC) Gross margin 58.3% $157.0M Non-GAAP operating profit* +26% $116.3M Non-GAAP net income* +23% $0.81 Non-GAAP EPS* +23% Cash flow from operations $48.1M Free cash flow $35.1M * ResMed adjusts for the impact of the amortization of acquired in
Slide 37: Diversified revenue – by geography & by business
Diversified revenue – by geography & by business Europe, OOH SaaS Asia and Other 8% 36% Masks and Accessories Devices 37% 55% US, Canada and Latin America 64% Note: Represents Q1 2019 revenue breakdown © 2018 ResMed I Q1 2019 Investor Presentation I 37
Slide 38: Focus on operating excellence is driving improved operating leverage
Focus on operating excellence is driving improved operating leverage ($ in millions) Non-GAAP Operating 23.7% 26.7% Profit Margin $750 $588 $524 $500 $250 $124 $157 $- 1Q18 1Q19 Non-GAAP Operating Income Revenue © 2018 ResMed I Q1 2019 Investor Presentation I 38
Slide 39: Track record of disciplined financial growth
Track record of disciplined financial growth Revenue ($B) Adjusted EPS Quarterly dividend 9% 9% CAGR $2.3 CAGR $3.53 16% CAGR $0.35 $1.5 $2.27 $0.17 2013 2018 2013 2018 2013 2018 Fiscal Years ended June 30 © 2018 ResMed I Q1 2019 Investor Presentation I 39
Slide 40: Proven capital management
Proven capital management Capital Deployment Free Cash Flow returned Increasing Dividend Investment for Growth to Shareholders New Products Last twelve months combined FY 2018 dividend payout ratio dividend and stock of 39% of Adj. net income Geographic expansion repurchase = 70% of free D
Slide 41: Changing lives with every breath
Changing lives with every breath In the last 12 months, we changed more than 14 million lives. Our aspiration is to change 20 million lives by 2020 © 2018 ResMed I Q1 2019 Investor Presentation I 41
Slide 42: Why invest? – driving long-term shareholder value
Why invest? – driving long-term shareholder value Market Dynamics Growth & Innovation Financial Results • Underpenetrated • Global leader in • Historical revenue and markets in sleep & connected health for profit growth COPD sleep and respiratory • Recurring revenue care • Healthcare costs • Operati
Slide 43: Contact Investor Relations
Contact Investor Relations Phone: (858) 836-5971 Email: investorrelations@resmed.com Website: www.investors.resmed.com © 2018 ResMed I Q1 2019 Investor Presentation I 43