Resmed Inc. · NYSE:RMD
Resmed — Investor Day (2024)
71 slides from Resmed's investor day presentation, 2024
Slide 1: 2024 Investor Day
2024 INVESTOR DAY
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: Transforming sleep health, breathing health and health technology at home
Transforming sleep health, breathing health and health technology at home with market-leading solutions Mick Farrell 3
Slide 4: ResMed has a very strong track record of financial performance
ResMed has a very strong track record of financial performance Revenue Non-GAAP Non-GAAP EPS Free Cash ($B) 12% CAGR Operating 16% CAGR ($)1 16% CAGR Flow ($M) 27% CAGR Income ($M)1 $4.7 $1,478 $1,302 $7.72 $2.6 $716 $3.64 $390 FY2019 FY2024 FY2019 FY2024 FY2019 FY2024 FY2019 FY2024 1. Refer to non-
Slide 5: Our vision
Our vision We envision a world where every person can achieve their full potential through better sleep and breathing, with healthcare delivered right in their own home 5
Slide 6: Our mission
Our mission we create life-changing health technologies that people love 6
Slide 7: Our path to 2030
Our path to 2030 In 2030, we will empower 2030 Strategy 500M+ People Worldwide to drive higher market growth and to achieve their Incredible market highest potential take advantage of opportunity significant value in sleep health, with adjacencies breathing health and A foundation of health tech at
Slide 8: Our journey and strategic evolution
Our journey and strategic evolution ResMed 2030 2015 - Today + Sleep health + Breathing health 2005 - 2014 + Fully cloud connectable + Health technology at home + Smallest, devices + Leading innovation in ML/AI, 1989 - 2004 quietest, most + Lower costs, Gen-AI in sleep & breathing comfortable improv
Slide 9: World's market-leading health tech
Our focus areas Problems we solve Sleep Health Sleep apnea, insomnia, COMISA, PLMS, RLS Sleep health issues — largely and beyond undiagnosed — represent a World’s global problem of staggering scope and scale. Breathing Health COPD, overlap market-leading syndrome, OHVS, NMD and beyond health tech Th
Slide 10: Large and underpenetrated market with unmet sleep and breathing health needs
Large and underpenetrated market of people worldwide with unmet sleep health and breathing health needs – this is an epidemic… 480M Overlap COPD syndrome 860M COMISA 1B+ Insomnia Sleep Apnea 2.3B+ People PEOPLE who need health tech at home 10
Slide 11: We have strong, sustainable competitive advantages
We have strong, sustainable competitive advantages #1 #1 PAP market Innovative product Connected digital positions in over 140 and technology health technology countries with strong portfolio – our lowers cost, improves brand presence pipeline is full adherence Market leader in Very strong track Wor
Slide 12: Global leadership in connected and digital health
Supported by global leadership in connected and digital health 19B Nights of respiratory medical data +28% (3-year CAGR ) +19% (3-year CAGR) +20% (3-year CAGR) Patients Medtech devices 28M in AirView software ecosystem 26M with 100% cloud-connectable comms +11% (3-year CAGR) +33% (3-year CAGR) Accou
Slide 13: We integrate intelligent products and solutions
We integrate intelligent products Driving value for patients, and solutions to drive better experience, providers and ResMed lower costs, and better outcomes Improve Increase patient long-term Mask/accessory resupply within experience1 adherence4 Intelligent ecosystem Consumer Engagement Scale in ad
Slide 14: Leveraging megatrends in the global marketplace
Leveraging megatrends in the global marketplace Consumers are Wearables from Consumers AI and digital Pressure on more focused on Apple, Samsung demand an health are healthcare systems their health than spotlight on sleep elevated changing how is massive and ever before apnea and sleep experience fo
Slide 15: The enhanced spotlight on sleep apnea brings increased opportunity
The enhanced spotlight on sleep apnea brings increased opportunity Pharma and consumer tech companies are bringing Pharma Consumer tech more patients into PCPs/GPs. Weight loss and sleep apnea treatment have been used together for decades… they are a clear “better together” story. Sleep Apnea Patien
Slide 16: Real-world data analysis shows positive correlation between GLP-1s and PAP therapy
Real-world data analysis GLP-1 initiated1,2 vs. non-GLP-1 initiated OSA patients1 in Sleep Apnea population shows significant Likely to initiate PAP therapy3 PAP resupply rates4 1-year post-setup PAP resupply rates4 2-year post-setup positive correlation +530 bps between GLP-1s +1070 bps +310 bps an
Slide 17: Funnel growth potential from consumer tech detection of sleep apnea
Significant funnel growth potential from consumer tech detection of sleep apnea Samsung® Apple® Galaxy Watch Watch FDA de novo clearance for FDA clearance moderate to severe sleep for sleep apnea apnea detection (2024) detection (2024) Apple, Ap ple Health and Apple Watch are trademarks of Ap ple In
Slide 18: Our 2030 Strategy will drive growth and value creation
Our 2030 Strategy will drive growth and value creation Grow and differentiate our Capitalize on market Invest 7% of R&D to invent, unmatched sleep apnea opportunity and brand create and differentiate a fully franchise, led by demand advantage in broader integrated digital ecosystem gen and demand ca
Slide 19: ResMed's 2030 operating model
ResMed’s 2030 operating model accelerates ability to reach consumers where they are, execute and unlock value Focused and strategic roadmap PRODUCT-LED … increase product velocity Dynamic global revenue team CUSTOMER-CENTRIC … increase profitable growth Unified global marketing team BRAND-ENHANCED …
Slide 20: Experienced and passionate leadership team
Experienced and passionate leadership team - focused on results Mick Farrell Brett Sandercock Justin Leong Katrin Pucknat Mike Fliss Bobby Ghoshal Vered Keisar Hemanth Reddy Chairman & CEO Chief Financial Chief Product Chief Marketing Chief Revenue Chief Commercial Chief People Chief Strategy Office
Slide 21: Why ResMed
Incredible market opportunity Strong team with an excellent track record of execution and results Why ResMed 2030 Strategy: significant growth ahead in core and new markets 21
Slide 22: Our 2030 Strategy to drive sustained growth and value creation
Our 2030 Strategy to drive sustained growth and value creation Hemanth Reddy 22
Slide 23: Key Takeaways
Focused on large, growing and underpenetrated Key markets covering 2.3 billion people with unmet sleep and breathing health needs, with expansion to enhance TAM Takeaways Shifting the basis of competition yet again with a tangible AI and data-driven competitive advantage Accelerating market penetrat
Slide 24: ResMed 2030 Strategy
ResMed OUR 2030 STRATEGY OUR OUR KEY FOCUS CAPABILITIES AREAS We will create products people love as well as Sleep Health seamless, personalized Empower our teams Breathing Health pathways for access Prioritize AI OUR OUR MISSION to life-changing care FINANCIAL Health Tech at Home Build trust GOAL W
Slide 25: ResMed 2030 Strategy
ResMed OUR FOCUS OUR 2030 STRATEGY OUR AREAS OUR KEY FOCUS CAPABILITIES AREAS We will create products people love as well as Sleep Health seamless, personalized Sleep Health Empower our teams OUR Breathing Breathing Health Health pathways for access Prioritize AI OUR OUR MISSION MISSION to life-chan
Slide 26: ResMed 2030 Strategy
ResMed OUR 2030 OUR STRATEGY OUR KEY FOCUS CAPABILITIES AREAS We will create products Sleep Health people love as well as Empower our teams OUR Breathing Health seamless, personalized Prioritize AI OUR MISSION FINANCIAL Health Tech at Home Build trust GOAL pathways for access to life-changing care W
Slide 27: ResMed 2030 Strategy
ResMed OUR OUR KEY 2030 STRATEGY OUR CAPABILITIES FOCUS AREAS We will create products people love as well as Sleep Health seamless, personalized Empower our teams Breathing Health pathways for access Prioritize AI OUR OUR MISSION to life-changing care FINANCIAL Health Tech at Home Build trust GOAL W
Slide 28: ResMed 2030 Strategy
ResMed OUR 2030 STRATEGY OUR OUR KEY FOCUS CAPABILITIES AREAS We will create products people love as well as OUR Sleep Health seamless, personalized FINANCIAL Empower our teams GOAL Breathing Health pathways for access Prioritize AI OUR MISSION Health Tech at Home to life-changing care Build trust W
Slide 29: ResMed 2030 Strategy
ResMed OUR 2030 STRATEGY OUR OUR KEY FOCUS CAPABILITIES AREAS We will create products people love as well as Sleep Health seamless, personalized Empower our teams Breathing Health pathways for access Prioritize AI OUR OUR MISSION to life-changing care FINANCIAL Health Tech at Home Build trust GOAL W
Slide 30: Our Strategy: create products people love
Our Strategy We will create products people love as well as seamless, personalized pathways for access to life-changing care. 30
Slide 31: We integrate intelligent products and solutions
We integrate intelligent products Driving value for patients, and solutions to drive better experience, providers and ResMed lower costs, and better outcomes Improve Increase patient long-term Mask/accessory resupply within experience1 adherence4 Intelligent ecosystem Consumer Engagement Scale in ad
Slide 32: How we accelerate market growth
How we accelerate market growth WE WILL… Create amazing products and solutions that + Releasing products at an unprecedented velocity with new product team structure people love. + Delivering more consumer-friendly products integrated as a digital ecosystem Driving consumer loyalty through omnichann
Slide 33: We will deliver our strategy through our Annual Operating Plan
We will deliver our strategy through our Annual Operating Plan VI SION MISSION 2030 Annual Operating Plan C U LT UR E STRATEGY Roadmap, Plan, Tactics STRATEGIC IMPERATIVES Achieve top-tier Transform consumer experience Build brand strength profitable revenue growth across entire health journey How w
Slide 34: Key Takeaways
Focused on large, growing and underpenetrated Key markets covering 2.3 billion people with unmet sleep and breathing health needs, with expansion to enhance TAM Takeaways Shifting the basis of competition yet again with a tangible AI and data-driven competitive advantage Accelerating market penetrat
Slide 35: Innovative product-led strategy to drive growth
Innovative product-led strategy to drive growth Justin Leong 35
Slide 36: Key Takeaways
We are focused on creating new forms of competitive advantage as well as growing the overall market We are investing in a balanced portfolio of products in our core and adjacencies to deliver short and long-term value creation Key We have organized ourselves to execute an Takeaways ambitious roadmap
Slide 37: Sleep Apnea Core: how we will drive growth & value creation
How we will drive growth & value creation Layers of value creation Key enablers OV ERA LL HEALTH B REATHI NG HE ALT H Sleep SL EEP HEALT H Apnea Core SL EEP AP NEA C ORE 37
Slide 38: Building on our product leadership track record
Building on our product leadership track record Devices Masks Apps / Cloud 38
Slide 39: Our strategy changed the basis of competition
Our strategy changed the basis of competition Current basis of competition 19B nights of sleep data S MAL LER, Q UIETER , DEVICE 28M patients in MORE COMFO RTABLE CONNECTIVITY AirView 26M therapies PROVIDE R WO RKFLOW EF FICENCY S OF TWARE connected devices * Areas un der exploration - developin g a
Slide 40: Our product strategy
Our product strategy Redefine PAP therapy. Simplify care management. Transform the experience. Expand beyond PAP. 40
Slide 41: Redefine PAP therapy
Redefine PAP therapy Personalized and intelligent products from population to personal
Slide 42: Consumer-centric design: our new AirTouch N30i mask
Redefine PAP therapy Consumer-centric design: our new AirTouch N30i mask New fabric-wrapped frame Delivering comfort and appeal with full surround soft-touch, quick-drying fabric sleeve provides extra comfort and instant appeal consumers desire1... New ComfiSoft cushion rated AT N30i to be appealing
Slide 43: Intelligently connected Provider ecosystem
Simplify Care Management Intelligently connected Provider ecosystem + + Playing a greater role in diagnosis Increasing speed and capacity Enhancing patient compliance and workflows upstream of of DMEs to accelerate patient and democratizing data in the therapy to transform pathway setup and resupply
Slide 44: Creating a seamless omnichannel experience
Transform the experience Creating a seamless omnichannel experience + +
Slide 45: Immense unmet need - the world is looking for better sleep
Expand beyond PAP Immense unmet need - the world is looking for better sleep $85B+ 4/10 56% Estimated sleep 36% of people are Individuals with less Women who suffer economy in 20241 tracking their sleep than 3 nights of from disturbed or using wearables2 quality sleep per broken sleep2 week2 1. 2. P
Slide 46: Expand beyond PAP
Expand beyond PAP Sleep Health PA P Overall health Breathing Health 46
Slide 47: Product-led organization and execution for our next phase
Product-led organization and execution for our next phase Culture of product Clear missions, strong Enduring, autonomous managers thinking like governance & rapid product teams P&L leaders execution (Agile) value feasibility team mission PI + sprints PM Eng viability usability QBR Delivery Design 47
Slide 48: How our roadmap will translate to financial performance
How our roadmap will translate to financial performance Driving revenue growth... …and margin expansion + Increasing the velocity of new product + New software offerings to bring high launches margin recurring revenue + Creating a more seamless pathway and + Sleep health expansion to increase increa
Slide 49: Key Takeaways
We are focused on creating new forms of competitive advantage as well as growing the overall market We are investing in a balanced portfolio of products in our core and adjacencies to deliver short and long-term value creation Key Takeaways We have organized ourselves to execute an ambitious roadmap
Slide 50: Residential Care Software has leading capabilities
Residential Care Software has leading capabilities and is a powerful enabler of our products and solutions Bobby Ghoshal 50
Slide 51: We integrate intelligent products and solutions
We integrate intelligent products Driving value for patients, and solutions to drive better experience, providers and ResMed lower costs, and better outcomes Improve Increase Mask/accessory patient long-term resupply within experience1 adherence4 ecosystem Intelligent Consumer Engagement Scale in ad
Slide 52: Addressing key industry trends and challenges
Pressure on healthcare AI and digital health are changing how systems is massive healthcare is delivered ~81M: expected 65+ population by 2040, 1.82x increase in home and virtual more than double the number in 20001 care expected by 20345 Addressing $10.8B: U.S. digital health funding in 20236 42% i
Slide 53: Residential Care Software and data products are mission-critical
Residential Care Software and data products are mission-critical and provide insights to drive better care DIFFERENTIAT ED CAPABILITIES SIGNIFICANT PAT IENT POP ULATION AND ACC ESS TO DATA Mission-Critical EHR, Ancillary Software Modules and Services 110M+ patients and residents impacted Empower pro
Slide 54: Accelerating revenue growth and net operating profit
Accelerating revenue growth and net operating profit Residential Care Software Revenue ($M) Residential Care Software Net Operating Profit ($M) 700 600 154 500 584 400 498 116 300 401 94 200 100 0 FY22 FY23 FY24 FY22 FY23 FY24 + Organic growth and acquisition of MEDIFOX DAN + Driving operating lever
Slide 55: Significant synergies between Residential Care Software and core business
Significant synergies between Residential Care Software and our core business Revenue synergies Device and accessory Identifying sleep and Getting on therapy resupply breathing health risk Facilitates resupply revenue to Assists with identification of sleep Helps patients get the right customers on
Slide 56: Resupply through Brightree and SNAP
Uniquely positioned to serve ResMed patients Resupply with resupply through Brightree and SNAP Insurance and eligibility verification Dedicated resupply Order Setup Billing customer entry service Insurance Prep equip Training and verification for setup troubleshooting Payer billing Resupply automati
Slide 57: Identification of OSA across all care settings
Patients across Identification of OSA care settings across all care settings + 56% of people 65+ have a high risk Unique residents managed annually for OSA1 – but the prevalence of OSA in MatrixCare and MEDIFOX DAN1 diagnoses across the population noted in the SNF, LPC and SL MatrixCare ecosystem is
Slide 58: Leveraging back-end capabilities to advance global health tech leadership
HME-Supply history Home Leveraging back-end capabilities to advance global health tech leadership COMPLETE INSURANCE AND Skilled Nursing PHARMACY INFO Facility Stay Leveraging global infrastructure scale through: Cloud AI / ML Cybersecurity computing Privacy and Software engineering compliance veloc
Slide 59: Key Takeaways
Better connects care pathways to deliver stronger patient outcomes and reduce costs Residential Care Software has leading capabilities with a track record of financial performance Key Takeaways Provides significant revenue and infrastructure synergies with core business 59
Slide 60: Our strong financial foundation enables our next phase of growth
Our strong financial foundation enables our next phase of growth Brett Sandercock
Slide 61: Track record of delivering value for ResMed shareholders
Track record of delivering value for ResMed shareholders Strong execution Sustained Robust cash flow enables since 2021 Investor Day value creation disciplined capital allocation by consistently generating top- focused on innovation investment, REVENUE CAGR quartile ROE, expanding presence strategic
Slide 62: Sustained history of strong financial results
Sustained history of strong financial results Revenue 12% CAGR ($B) 4.7 4.2 52% 58% 3.6 FY24 DEVICES FY24 U.S., CANADA, & LATIN AMERICA 3.2 3.0 Revenue Revenue 2.6 by Business 35% by Region MASKS & OTHER 29% EUROPE, ASIA, & OTHER 13% 13% RESIDENTIAL RESIDENTIAL CARE CARE SOFTWARE SOFTWARE FY19 FY20
Slide 63: Sustained history of strong financial results
Sustained history of strong financial results Revenue Net Operating Profit Earnings per Share ($B) 12% CAGR ($B) & Margin 1 16% CAGR ($)1 16% CAGR 4.7 1.5 4.2 1.2 3.6 7.7 3.2 1.1 3.0 1.0 6.4 2.6 0.9 5.8 5.3 0.7 4.8 30% 31% 30% 29% 32% 3.6 27% FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY
Slide 64: ResMed is in the top quartile of our peer group
ResMed is in the top quartile of our peer group across key financial metrics PE ER GR OUP 1 EBIT Margin Earnings per Share Return on Equity (LTM)2 32% (5-year CAGR)2 16% (LTM) 23% 4th Quartile 28% 35% 4th Quartile 13% 83% 4th Quartile 22% 63% 3rd Quartile 24% 28% 3rd Quartile 8% 13% 3rd Quartile 15%
Slide 65: Operating excellence initiatives provide opportunities for margin expansion
Operating excellence initiatives provide opportunities for gross margin expansion and operating leverage Gross 59.1% + Economies of scale, new product 57.7% 58.5% Margin1 56.5% 56.0% 56.9% introductions, manufacturing efficiencies and product mix expected to more than offset cost inflation impacts o
Slide 66: Liquidity Measures
Strong financial Operating Cash Flow ($M) 1,401 health with low 351 693 capital requirements FY22 FY23 FY24 creates robust cash Capital Expenditure ($M) generation 135 120 100 Key Metrics FY22 FY23 FY24 Current Ratio1 2.6x Liquidity Measures Debt/EBITDA Ratio2 <1.0x Free Cash Flow ($M) 1,302 Free Ca
Slide 67: Capital allocation strategy that prioritizes innovation
Capital allocation strategy that prioritizes innovation Reinvestment in core Strategic tuck-in acquisitions Return of capital to enhance value creation shareholders + Prioritize core innovation + Disciplined approach to M&A + Balanced capital returns + Focus on high-return projects + Focus on integr
Slide 68: Leadership position in Residential Care Software driven by key acquisitions
Leadership position in Residential Care Software driven by key acquisitions FOCUSED ON: Residential Care Software now represents ~13% of Group revenue Delivering growth, expanding Q4 FY24 revenue run-rate of ~$600 million with NOP margins of 28% operating margins Delivered significant revenue and co
Slide 69: Long-term targets driven by strong foundation and focused 2030 Strategy
Long-term targets driven by strong foundation and focused 2030 Strategy Near-term guidance 5-year outlook 59% - 60% High single digits Gross Margin Revenue Growth 18% - 20% of revenue Earnings growth higher than SG&A revenue growth 6% - 7% of revenue Underpinned by 2030 Strategy: R&D + Increasing ov
Slide 70: Appendix
Appendix
Slide 71: Key assumptions for financial outlook
Key SUSTAINED MARKET REGULATORY assumptions DEMAND: Continued global growth in ENVIRONMENT STABILITY: The regulatory landscape will for financial demand for sleep apnea and respiratory care products, driven remain stable and manageable, with no significant changes that outlook by demographic trends