Slide 1: Mission and Vision: Investor Presentation
Mission To develop and provide solutions that make life better for people living with diabetes Advance every day together Vision A life unlimited Investor Presentation by diabetes March 7, 2022 1
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains certain estimates and other forward-looking statements (as defined under Federal securities laws) regarding Embecta Corp.’s (“embecta’s”) future prospects and performance, including, but not limited to, future revenues, margins, leverage targets,
Slide 3: Presenters
Presenters Dev Kurdikar Jake Elguicze Chief Executive Officer Chief Financial Officer of embecta of embecta • Joined BD February 2021 and currently serves as Worldwide • Joined BD May 2021 and currently serves as SVP, Finance, President, BD Diabetes Care Diabetes Care • Served as CEO and president f
Slide 4: Discussion Topics
Discussion Topics Topic Presenter Welcome Dev Kurdikar Overview of embecta • The global diabetes landscape • embecta’s position of strength • Immediate benefits of the spin Dev Kurdikar • Global growth opportunities Financial overview Jake Elguicze Q&A All 4
Slide 5: embecta's strong position after the spin
embecta’s strong position after the spin Our stable core provides the foundation for new growth opportunities An expanding Strong, trusted core Immediate benefits Opportunities category business of the spin for growth ✓ Pure-play diabetes ✓ Established brand ✓ Compelling financial ✓ Deliver organic
Slide 6: Overview of embecta
Overview of embecta 1. 2. 3. 4. The global diabetes embecta’s Why the spin Reinvesting in landscape enduring position creates a stronger ourselves to pursue of strength embecta at day 1 global growth A growing space opportunities defined by lifelong Trusted leader Strong core treatment with best-in-
Slide 7: Overview of embecta
Overview of embecta 1. 2. 3. 4. The global diabetes embecta’s Why the spin Reinvesting in landscape enduring position creates a stronger ourselves to pursue of strength embecta at day 1 global growth A growing space opportunities defined by lifelong Trusted leader Strong core treatment with best-in-
Slide 8: The global diabetes landscape
The global diabetes landscape A growing space where people with diabetes (PWD) need chronic treatment Prevalence of diabetes Diabetes requires chronic, Standard of care persists, is steadily and lifelong treatment: while unmet needs consistently rising: create opportunities: Rates of diagnosis, Once
Slide 9: Prevalence and cost of diabetes
Prevalence and cost of diabetes Growing consistently around the world Total (MM) (1) Europe (MM) (1) 46% +246M North America & Caribbean (MM)(1) 13% 537 783 61 69 2021 2045 24% 2021 2045 51 63 2021 2045 Western Pacific (MM) (1) 27% Prevalence 206 260 • 1 in 10 adults have diabetes 2021 2045 • 3 in 4
Slide 10: Diabetes in emerging markets
Diabetes in emerging markets Increases in prevalence, diagnosis, and treatment rates Key drivers ’21-’26 Commentary Trajectory Total base population • Based on pace of underlying population growth Total number of people in emerging markets Prevalence rate • Increasing due to dietary shifts, urbaniza
Slide 11: Life-long dependence on insulin for PWD
Life-long dependence on insulin for PWD Type 1 start on insulin at diagnosis; Type 2 progress to insulin dependency Type 1 diabetes (T1D) Type 2 diabetes (T2D) T1D is caused by an autoimmune process that attacks T2D occurs when the body doesn’t produce enough For T2 PWD, therapeutic regimens change
Slide 12: Injections are expected to remain the standard of care
Injections are expected to remain the standard of care Across developed markets and emerging markets Developed markets Emerging markets • Pump penetration(1) • As diagnosis and over the next decade treatment reaches more is expected to reach PWD, insulin treatment ~55-60% for T1 PWD likely to be via
Slide 13: Unmet needs remain, even with the most advanced treatments
Unmet needs remain, even with the most advanced treatments Insulin-dependent PWD face complex burden & daily challenges Must serve as own healthcare provider: Monitoring, making decisions, and completing healthcare tasks that reach into every aspect of daily life Self-monitoring Treatment adherence
Slide 14: Overview of embecta
Overview of embecta 1. 2. 3. 4. The global diabetes embecta’s Why the spin Reinvesting in landscape enduring position creates a stronger ourselves to pursue of strength embecta at day 1 global growth A growing space opportunities defined by lifelong Trusted leader Strong core treatment with best-in-
Slide 15: embecta's enduring strengths
embecta’s enduring strengths Trusted leader with best-in-class products and unmatched capabilities Trusted leader in the Best-in-class products Unmatched manufacturing, global marketplace: and brand: distribution and sales capabilities: The largest producer of Trusted brand leadership Produce ~7.6B
Slide 16: A long history and rich heritage in diabetes
A long history and rich heritage in diabetes Nearly 100 years of quality, trust, and innovation PORTFOLIO EVOLUTION 1897 1924 1952 1969 1988 1991-1999 1997 2003 A decisive handshake Pen needle First insulin syringe First introduction Thin wall between Maxwell First “disposable” New needle First shor
Slide 17: embecta is a leader in the global marketplace
embecta is a leader in the global marketplace Our strong core business reaches PWD around the world embecta by the numbers(1) #1 ~7.6B ~30M ~2,000 Producer of diabetes Units produced annually PWD reached annually Employees globally injection devices across 3 world-class facilities >100 600+ $1.16B ~
Slide 18: Leadership across the injection platform
Leadership across the injection platform Segment leadership in multiple product categories Conventional Pen Needles and BD BD Nano 2nd Gen.TM #1 Globally(1) NanoTM Syringes Conventional Syringes #1 Globally(1) BD Safety BD AutoShield SafetyGlideTM #1 Globally(1) DuoTM Notes: 18 (1) Based on internal
Slide 19: embecta is the #1 brand in the growing pen needle category
+0.6% ~50% embecta is the #1 brand in the growing pen needle category vs. LY SOC Based on strong legacy, clinical leadership, and customer loyalty Pen needle portfolio Strategic focus • Comprehensive portfolio of needle lengths (4mm, 5mm, • Demonstrate clinical leadership -- increase awareness 6mm,
Slide 20: embecta is #1 in insulin syringes
+0.6% ~50% embecta is #1 in insulin syringes vs. LY SOC Poised to take advantage of shift to pen needles Syringe portfolio Strategic focus • Full portfolio of needle lengths (6mm, 8mm 12.7mm) with • Position syringes with pen needle portfolio as single injection strategic focus on driving to shorter
Slide 21: Solidifying our position in the safety pen needle category
+0.6% ~50% Solidifying our position in the safety pen needle category vs. LY SOC Providing the basis to drive future growth Safety products portfolio Strategic focus Safety pen needles: • Enhance safety value offer through innovation, services, and outcomes • AutoShield Duo™ was the first safety pen
Slide 22: Clinical evidence differentiates our products & builds our credibility
Clinical evidence differentiates our products & builds our credibility Data, education, and publications engage HCPs We support peer-reviewed research and We have built credibility through studies education to engage HCPs: in top-tier scientific publications: • First to publish studies on skin thick
Slide 23: A leadership position based on core strengths
A leadership position based on core strengths Scale, quality, and efficiency create competitive advantages History, reputation, Manufacturing Commercial capabilities brand ~100-year history of trust and high- Highly automated Global distribution centers quality global brand Established relationships
Slide 24: Unmatched volume through preeminent manufacturing infrastructure
Unmatched volume through preeminent manufacturing infrastructure We supply 7.6B units annually – with flexibility for changing capacity Dun Laoghaire, Ireland Holdrege, NE Suzhou, China World’s largest manufacturer World’s largest manufacturer Local pen needle production of pen needles of insulin sy
Slide 25: Global distribution network
Global distribution network Our products are available globally Our capabilities POST-TSA PLAN Mfg plant • Extensive manufacturing network supported DC by robust global logistics infrastructure, with ~800,000 sq ft of manufacturing space across the United States, Ireland and China Dún Laoghaire Oakv
Slide 26: Extensive distribution and sales infrastructure
Extensive distribution and sales infrastructure We reach more PWD globally than any competitor Best-in-class distribution network Global sales force across markets Deliver products to ~30M PWD Over 50% of 600+ commercial in 100+ countries each year employees in emerging markets Established partnersh
Slide 27: Go-to-market strategies differ across geographies
Go-to-market strategies differ across geographies Ensuring product differentiation and reimbursement In each region, our commercial strategies and capabilities are designed to manage reimbursement and market dynamics. North America EMEA Asia Latin America Ongoing collaboration with Regional commerci
Slide 28: Advantages of our digital health offerings
Advantages of our digital health offerings We provide stakeholders with actionable insights for better care Data Actionable insights 400,000+ Personalized Clinician Treatment ✓ Blood glucose tracking app downloads support education ✓ Insulin dosing Improved glycemic control Individualized treatment
Slide 29: We reach every stakeholder in the buying process
We reach every stakeholder in the buying process Spanning partners, channels, and touchpoints PWD Retailers HOW WE ENGAGE: HOW WE ENGAGE: • Tools for education, engagement, • In-store programming and promotional planning and adherence • HQ consulting and portfolio optimization • Search and digital m
Slide 30: Overview of embecta
Overview of embecta 1. 2. 3. 4. The global diabetes embecta’s Why the spin Reinvesting in landscape enduring position creates a stronger ourselves to pursue of strength embecta at Day 1 global growth A growing space opportunities defined by lifelong Trusted leader Strong core treatment with best-in-
Slide 31: Why the spin creates a stronger embecta at day 1
Why the spin creates a stronger embecta at day 1 Steady core provides basis for growth – led by a world-class team Our core provides basis Broadly defensible core We have strong for growth: business: organizational capabilities: We launch with a healthy Our IP position, Our unique opportunities bala
Slide 32: Our business provides a financial foundation for growth
Our business provides a financial foundation for growth Business model and a healthy balance sheet provide a strong core Stable, recurring, geographically- Healthy margin Strong cash flow Modest leverage Starting cash diversified profile generation at spin balance revenue base Vast majority of PWD B
Slide 33: We have built a defensible position around our core business
We have built a defensible position around our core business IP, manufacturing, and cannula agreement are a competitive advantage Intellectual property Manufacturing strengths Cannula agreement • embecta launches with a robust IP • Highly automated plants with • Supplier concentration risk is and pa
Slide 34: Experienced leadership team and world-class talent
Experienced leadership team and world-class talent Internal and external hires with deep med-tech experience Dev Kurdikar Jake Elguicze Jeff Mann Colleen Riley Ajay Kumar CEO CFO GC & Business Development CTO CHRO Previously CEO and President Previously Treasurer and VP Previously SVP General Counse
Slide 35: Values
Values Integrity External Focus Results Oriented Hungry Mindset We act with utmost We continually seek to We measure ourselves We act with urgency integrity and hold understand the needs of by results and we and persist in the face ourselves accountable people with diabetes, relentlessly strive for
Slide 36: Strong organizational capabilities
Strong organizational capabilities Clear incentives, innovative culture, agile decision-making We will tie compensation directly to results – incentivizing Clear incentives: innovation and delivery. We will build an innovative, results-oriented culture with a hungry Innovative, hungry culture: minds
Slide 37: Overview of embecta
Overview of embecta 1. 2. 3. 4. The global diabetes embecta’s Why the spin Reinvesting in landscape enduring position creates a stronger ourselves to pursue of strength embecta at Day 1 global growth A growing space opportunities defined by lifelong Trusted leader Strong core treatment with best-in-
Slide 38: We will invest strategically to accelerate our long-term growth profile
We will invest strategically to accelerate our long-term growth profile Including commercial investments, next-gen products, and M&A Expand and penetrate Stronger R&D: M&A potential: through the core: We have opportunities to We can enter the T2D market We will seek partnerships drive growth in the
Slide 39: Insulin administration category provides a large opportunity
Insulin administration category provides a large opportunity $6-$8 billion insulin delivery market Est. global insulin delivery market opportunity (in $B)(1) Total = $6-$8B Injection devices (Syringes, Pen Needles) Pumps FY ’21 rev ~ $1.2B ~5% of ~95% of patients patients Injections account for ~95%
Slide 40: Immediate opportunities to expand and penetrate within the core
Immediate opportunities to expand and penetrate within the core Across developed and emerging markets STRATEGIES Expand share in Drive safety pen Drive adherence Invest in omnichannel growing e-commerce needle business ILLUSTRATIVE EXAMPLES Partner with pharmacy retailers Increase digital impression
Slide 41: Pen needle innovations
Pen needle innovations Improve user experience and strengthen core business Safety PN Finer gauge PN Safety pen needle: Finer gauge pen needle: Develop the next gen safety pen needle Develop a new finer gauge pen needle product that is both smaller and thinner that combines the unique design of Nano
Slide 42: Insulin pump therapy has substantial potential for T2D users
Insulin pump therapy has substantial potential for T2D users But steep barriers remain The commercial opportunity is large Barriers have constrained greater penetration • US T2D insulin intensive = ~2-2.5M PWD (in 2021)(1) • Insulin pump therapy was originally designed for use in T1D diabetes • Pump
Slide 43: Our patch pump in development is a PWD and HCP-informed solution
Our patch pump in development is a PWD and HCP-informed solution With Breakthrough Device Designation(1) from the FDA Patch pump designed for differentiation and to reduce the adoption barrier Our open-loop Our closed- Tubeless Tubed Designed For: pump loop pump patch pumps pumps Improved user exper
Slide 44: M&A and partnership opportunities
M&A and partnership opportunities We will seek opportunities that fit key criteria embecta can leverage embecta can leverage Opportunities reflect the its global commercial its manufacturing needs of different capabilities. expertise. markets. Opportunities to Bolster Execution 44
Slide 45: Financial Overview
45 Financial Overview embecta’
Slide 46: Stable revenue profile driven by consumable product portfolio
Stable revenue profile driven by consumable product portfolio… Revenue ($ Millions) Revenue ($ Millions) $1,400 $1,400 $1,165 $1,188 $23 $1,165 $1,188 $1,200 $1,109 $1,200 $1,109 $1,086 $1,086 $16 $16 $18 $20 $121 $121 $1,000 $115 $110 $1,000 $175 $175 $186 $164 $556 $556 $800 $800 $539 $523 $600 $6
Slide 47: Leads to strong gross profit and adjusted EBITDA
…Leads to strong gross profit and adjusted EBITDA… Gross Profit ($ Millions) Adjusted EBITDA ($ Millions) $600 $548 $537 $546 $786 $800 $778 $800 $763 $488 $600 $400 $400 $200 $200 $0 $0 FY '19 FY '20 FY '21 PF FY '21 FY '19 FY '20 FY '21 PF FY '21 Percent Percent Margins: 70.9% 70.3% 68.7% 65.5% Ma
Slide 48: And sufficient financial flexibility to invest for growth
…And sufficient financial flexibility to invest for growth… • Partner with pharmacies to improve treatment adherence • Increased investment in Omnichannel and e-commerce • Focus on driving awareness and adherence in emerging markets with increasing Revenue populations of PWD • Drive innovation in di
Slide 49: While maintaining a conservative and balanced financial profile
…While maintaining a conservative and balanced financial profile • Mixture of Term Loan B and Senior Secured notes with extended maturity profile Capital • Solid Ba3 / B+ credit ratings from Moody’s and S&P Structure • Pro-forma FY’21 net leverage of ~2.8x(1) supports ample financial flexibility • S
Slide 50: embecta near-term financial profile and targets
embecta near-term financial profile and targets 1 Constant currency revenue growth CAGR expected to remain relatively flat over the near-term 2 Strong margins and cash flow generation allow embecta to employ “invest for growth” strategy 3 Acceleration of revenue growth profile expected to occur from
Slide 51: Summary
51 Summary embecta’
Slide 52: embecta's strong position after the spin
embecta’s strong position after the spin Our stable core provides the foundation for new growth opportunities An expanding Strong, trusted core Immediate benefits Opportunities category business of the spin for growth ✓ Pure-play diabetes ✓ Established brand ✓ Compelling financial ✓ Deliver organic
Slide 53: Thank you
Thank you embecta’
Slide 54: Appendix
54 Appendix embecta’
Slide 55: Bridge to Pro Forma Financials
Bridge to Pro Forma Financials Revenue ($ Millions) Gross Profit ($ Millions) Adj. EBITDA ($ Millions)(3) $1,300 $900 $600 $1,165 $23 $1,188 $800 $23 $546 $778 $1,100 ($45) $700 $500 ($23) $488 $900 ($33) $700 $500 $400 $500 $300 $300 $300 (1) FY'21A RMSA Impact PF FY'21A FY'21A RMSA MSA / PF FY'21A
Slide 56: FY'19 – FY'21 EBITDA Reconciliation
FY’19 – FY’21 EBITDA Reconciliation In addition to our operating results, as calculated in accordance with U.S. generally accepted accounting principles (GAAP), we use, and plan to continue using, EBITDA and Adjusted EBITDA when monitoring and evaluating operating performance. EBITDA is defined as e
Slide 57: Pro-Forma FY'21 Net Leverage Reconciliation
Pro-Forma FY’21 Net Leverage Reconciliation Dollars in Millions Term Loan B $1,150 Senior Secured Notes $500 Total Gross Debt $1,650 Less: Pro-forma cash and cash equivalents $265 Total Net Debt (A) $1,385 Pro-forma Adjusted EBITDA (B) $488 Pro-Forma FY’21 Net Leverage (A/B) 2.8x 57
Slide 58: FY'19 – FY'21 Constant Currency Revenue Growth CAGR Reconciliation
FY’19 – FY’21 Constant Currency Revenue Growth CAGR Reconciliation Dollars in Millions FY’19 – FY’21 F/X F/X FY’19 FY’20 FY’21 Constant Impact Impact Currency CAGR Revenue $1,109 $1,086 ($13) $1,165 $25 ~2% 58