Slide 1: One of the Best MedTech Companies in the World
One of the Best MedTech Companies in the World, Built on Innovation, Integrity & Persistence June 2024
Slide 2: Disclaimer
2 Disclaimer Masimo Corporation (“Masimo” or the “Company”) has neither sought nor obtained the consent from any third party to use any st ate ments or information contained in this presentation that have been obtained or derived from statements made or published by such third parties. Any such stat
Slide 3: Disclaimer Regarding Potential Separation
3 Disclaimer Regarding Potential Separation On March 22, 2024, Masimo announced that its Board of Directors has authorized management to evaluate a proposed separation o f t he company’s consumer business (the “Potential Separation”). Masimo’s Board of Directors and management are in the process of
Slide 4: Executive Summary
+ Masino Executive Summary
Slide 5: Masimo's Innovation Engine Has Delivered a Premium Valuation
EXECUTIVE SUMMARY 5 Masimo’s Innovation Engine has Delivered a Premium Valuation and Strong Foundation for Future Growth • Masimo is continuing its legacy of innovation and successful product launches to drive sustainable growth, evidenced by: ‒ 11% revenue CAGR since IPO; ‒ 5% median annual EPS bea
Slide 6: Politan's Record in Its First Twelve Months on Our Board
EXECUTIVE SUMMARY 6 Politan’s Record In its First Twelve Months On Our Board is a Powerful Argument Against Granting Control to Politan One year after joining the Board, Politan’s directors have… × offered no actionable strategic or operational suggestions × come up with no ideas to generate value
Slide 7: Politan is Fixated on Control
EXECUTIVE SUMMARY 7 Politan is Fixated on Control, Demonstrating that What it Promised a Year Ago Was a Lie Koffey failed to gain support from Masimo’s independent Board members due to his lack of affirmative business vision and bad faith behavior, and now he wants to use brute force to gain control
Slide 8: Politan is Putting Masimo's Culture, Innovation Premium and Growth at Risk
Politan is Putting Masimo’s Organizational Culture, Innovation Premium and Future Growth at Risk
Slide 9: Masimo is Delivering on a Compelling Strategy to Drive Innovation
9 Masimo is Delivering on a Compelling Strategy to Drive Innovation Note: 1. This preliminary estimate is being provided solely for illustrative and informational purposes. Masimo is currently evaluatin g t he structure of any potential separation of its consumer business, and the method, structure,
Slide 10: Masimo is Positioned to Generate Significant Value Leveraging Leading Technology
Note: 1. Reflects guidance disclosed on May 7, 2024 Q1 earnings call POLITAN IS PUTTING MASIMO’S ORGANIZATIONAL CULTURE, INNOVATION PREMIUM AND FUTURE GROWTH AT RISK 10 Masimo is Positioned to Generate Significant Value for Stockholders by Leveraging Industry - Leading Technology • Develops, manufac
Slide 11: Consistent Innovation and Successful Product Launches Drive Revenue Growth
Total Revenue ($MM) Source: Market estimates based upon internal data, iData & Futuresource 11 Consistent Innovation and Successful Product Launches Drive Sustainable Revenue Growth 108 224 256 307 349 405 439 493 547 587 630 695 798 858 938 1,144 1,239 2,036 2,048 2,105 2005 2006 2007 2008 2009 201
Slide 12: Innovation Engine Delivers a Leading Healthcare Portfolio
12 Masimo’s Innovation Engine Continues to Deliver a Leading Healthcare Portfolio Meriting a Premium Valuation Note: 1. Includes telehealth, opioid solutions and other revenues POLITAN IS PUTTING MASIMO’S ORGANIZATIONAL CULTURE, INNOVATION PREMIUM AND FUTURE GROWTH AT RISK Masimo’s Unique Right to W
Slide 13: Next Generation Wireless Sensors Expand Addressable Market
13 Our Next Generation Wireless Sensors and Platforms will Expand our Addressable Market Opportunity While Driving Margin Expansion Note: 1. Market estimates based upon internal data & iData POLITAN IS PUTTING MASIMO’S ORGANIZATIONAL CULTURE, INNOVATION PREMIUM AND FUTURE GROWTH AT RISK Today 2024 2
Slide 14: Masimo Historically Outperformed Market Benchmarks
14 Masimo Historically Outperformed Market Benchmarks and Remains Committed to Continuing to do so in the Future 60 80 100 120 140 160 180 Jun-23 Aug-23 Oct-23 Nov-23 Jan-24 Mar-24 Apr-24 Jun-24 Masimo Medical Devices Index Notes: 1. Market data as of 6/18/2024 2. TSR reflects dividend - adjusted to
Slide 15: The Public Markets Endorsed the Consumer Separation
TSR – Authorization to Separate Consumer Business 1 - Week Reaction (1) Politan’s Actions Impacted Sentiment Following Separation Announcement Source: Capital IQ Notes: 1. Total Shareholder Return includes dividends 2. Dow Jones U.S. Select Medical Device Index 3. Price change in relation to 3/22/20
Slide 16: Key Business KPI / Metrics
16 Key Business KPI / Metrics Despite Politan’s Obstruction, Masimo has Continued Delivering on its Growth Potential… POLITAN IS PUTTING MASIMO’S ORGANIZATIONAL CULTURE, INNOVATION PREMIUM AND FUTURE GROWTH AT RISK Incremental Value of New Contracts (1) $MM, through the first quarter of each year Dr
Slide 17: Professional Healthcare Path to ~30% Non-GAAP Operating Margin
17 Professional Healthcare ( RemainCo ) …Including a Path to ~30% Non - GAAP Operating Margin by 2029E (1) … POLITAN IS PUTTING MASIMO’S ORGANIZATIONAL CULTURE, INNOVATION PREMIUM AND FUTURE GROWTH AT RISK Preliminary Estimate: Financial Impact of a Potential Separation (2) Margin Improvement Initia
Slide 18: Professional Healthcare ~$8 Non-GAAP EPS by 2029E
18 Professional Healthcare ( RemainCo ) – Excludes Benefits of Any Cash Proceeds from Potential JV …and ~$8 Non - GAAP Earnings Per Share by 2029E (1) POLITAN IS PUTTING MASIMO’S ORGANIZATIONAL CULTURE, INNOVATION PREMIUM AND FUTURE GROWTH AT RISK Preliminary Estimate: Financial Impact of a Potentia
Slide 19: Masimo's R&D Spend In-Line with Industry Peers
19 Masimo’s R&D Spend In - Line with Industry Peers POLITAN IS PUTTING MASIMO’S ORGANIZATIONAL CULTURE, INNOVATION PREMIUM AND FUTURE GROWTH AT RISK Notes: 1. Masimo figures reflect non - GAAP R&D expense based on company filings; Peer Indexes reflect R&D inclusive of one - time adjustments made by
Slide 20: R&D Engine Drives Topline Growth and Premium Multiple
Current… Current Prem. to Select MedTech Peers 16.7x Last 1 Year Prem. to Select MedTech Peers 12.0x Pre-COVID… Last 1 Year Prem. to Select MedTech Peers 20.7x Last 3 Years Prem. to Select MedTech Peers 15.0x Last 5 Years Prem. to Select MedTech Peers 12.1x 0.0x 10.0x 20.0x 30.0x 40.0x 50.0x 60.0x 7
Slide 21: Masimo's R&D Process Works Under Joe's Leadership
sh 21 Masimo’s R&D Process Works Under Joe’s Leadership Our CEO is Integral to our R&D Success Robust Performance of Masimo’s R&D Team x 4,000+ patent filings x 11% Revenue CAGR Since IPO (1) x NTM P/E Premium to Peers of 16.7x “A Kiani - less MASI faces unknown risks related to key constituents suc
Slide 22: Our Record of Innovation Has Revolutionized the Healthcare Ecosystem
22 Our Game Changing Record of Innovation has Revolutionized the Healthcare Ecosystem Notes: 1. Emphasis added; quotes from Dr. José M. Camacho Alonso translated from Spanish “Having worked with hundreds of medical device vendors over the 47 years that I have been a registered respiratory therapist
Slide 23: Board Has Made Appropriate and Timely Governance Changes
The Board Has Made Appropriate and Timely Governance Changes, and Multiple Good Faith Overtures to Settle this Contest. Politan Has Refused Every Attempt
Slide 24: Independent Directors Have Refreshed the Board and Enhanced Governance
THE BOARD HAS MADE APPROPRIATE AND TIMELY GOVERNANCE CHANGES, AND MULTIPLE GOOD FAITH OVERTURES TO SETTLE THIS CONTEST. POLITAN HAS REFUSED EVERY ATTEMPT 24 The Independent Directors Have Meaningfully Refreshed the Board and Enhanced Corporate Governance We have continued to make governance and Boar
Slide 25: Thoughtful Nomination Process Identified Three New Directors
THE BOARD HAS MADE APPROPRIATE AND TIMELY GOVERNANCE CHANGES, AND MULTIPLE GOOD FAITH OVERTURES TO SETTLE THIS CONTEST. POLITAN HAS REFUSED EVERY ATTEMPT 25 Thoughtful Nomination Process Identified Three New Independent, Highly Qualified Board Additions since Last Year’s AGM Politan Directors’ oppos
Slide 26: Board Has Repeatedly Made Reasonable Settlement Offers
THE BOARD HAS MADE APPROPRIATE AND TIMELY GOVERNANCE CHANGES, AND MULTIPLE GOOD FAITH OVERTURES TO SETTLE THIS CONTEST. POLITAN HAS REFUSED EVERY ATTEMPT 26 The Board Has Repeatedly Made Reasonable Settlement Offers. Politan Insists on Control We have been creative in trying to find a solution and h
Slide 27: Politan Directors Continue to Obstruct and Delay
THE BOARD HAS MADE APPROPRIATE AND TIMELY GOVERNANCE CHANGES, AND MULTIPLE GOOD FAITH OVERTURES TO SETTLE THIS CONTEST. POLITAN HAS REFUSED EVERY ATTEMPT 27 The Politan Directors Continue to Obstruct, Delay, and Threaten Masimo’s Other Independent Directors We believe that the Politan directors have
Slide 28: Politan Offered No Solutions, Ideas, or Constructive Leadership
Politan Offered No Solutions, Ideas, or Constructive Leadership Shareholders Should Not Cede Politan Control
Slide 29: Koffey's Failed Leadership on the Special Committee
29 Koffey’s Failed Leadership on the Special Committee Presages the Risk of Granting Him Control of the Company • After hearing feedback from stockholders, Kiani and Koffey met to discuss the future of the Consumer Business • Kiani proposed a separation in which both Masimo’s Professional Healthcare
Slide 30: Politan Seeks to Eliminate Experience from the Boardroom
30 Politan Seeks to Eliminate Substantial Experience and Relevant Expertise from the Masimo Boardroom Christopher Chavez Joe Kiani x Profound experience and understanding of the field spanning over three decades in the medical device industry, including Chairman and/or CEO roles at TriVascular and A
Slide 31: Politan Seeks Control by Substituting Inferior Candidates
31 Politan Seeks to Gain Control by Substituting Inferior Candidates 4/6 5/6 x x x x x x Medical Device or Consumer Experience 2/6 4/6 x x x x Ability to Oversee a Large Complex Company 2/6 4/6 x x x x Public Company CEO 1/6 3/6 x x x Medical Device CEO Despite having a year to plan, Politan has nom
Slide 32: Koffey's Lack of Experience Leaves Him Incapable of Overseeing the Company
32 Koffey’s Lack of Experience Leaves Him Incapable of Effectively Overseeing the Company If Granted Control • Koffey has made it clear to our stockholders that he wants to cut the R&D engine that has driven the company’s success and pipeline of new products • Koffey’s lack of understanding of innov
Slide 33: We've Seen This Playbook Before: Politan's Poor Track Record
-10 40 90 140 Jun-23 Sep-23 Dec-23 Mar-24 Masimo S&P 500 80 100 120 140 160 Nov-23 Feb-24 May-24 Azenta S&P 500 70 90 110 130 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Centene S&P 500 33 We’ve Seen This Playbook Before and it Does Not End Well for Non - Politan Sto
Slide 34: Concluding Remarks
+ Masino Concluding Remarks
Slide 35: Innovation Engine Has Delivered a Premium Valuation
CONCLUDING REMARKS 35 Masimo’s Innovation Engine has Delivered a Premium Valuation and Strong Foundation for Future Growth • Masimo is continuing its legacy of innovation and successful product launches to drive sustainable growth, evidenced by: ‒ 11% revenue CAGR since IPO; ‒ 5% median annual EPS b
Slide 36: Appendix
+ Masino Appendix
Slide 37: Politan Providing Inaccurate and Incomplete Information
APPENDIX 37 We Strongly Believe Politan is Providing Inaccurate and Incomplete Information Politan’s Fictions “Ms. Brennan and Mr. Koffey did not even receive a substantive update about the [Masimo strategic alternatives review] process until the first in - person Board meeting, which occurred on Oc
Slide 38: Politan's Claims Regarding Process to Add Independent Directors
APPENDIX 38 We Strongly Believe Politan is Providing Inaccurate and Incomplete Information Politan’s Claims Regarding Masimo’s Process to Add Highly Qualified Independent Directors to its Board “On November 3, 2023 the Board appointed Mr. Classon as a Class II director, over the objections of the 20
Slide 39: Process to Add Independent Directors (Cont'd)
APPENDIX 39 We Strongly Believe Politan is Providing Inaccurate and Incomplete Information Politan’s Claims Regarding Masimo’s Process to Add Highly Qualified Independent Directors to its Board (Cont’d) “At [a Board meeting on May 16, 2024], the Board voted, over the objections of the 2023 Newly - E
Slide 40: Politan's Claims on June 2023 Board Meeting
APPENDIX 40 We Strongly Believe Politan is Providing Inaccurate and Incomplete Information “On Saturday, June 24, 2023, the Board met to delegate authority to Kiani to pursue and carry out a sale of the entire Company without any obligation to provide process updates to the Board or to obtain any ad
Slide 41: Politan's Claims Regarding Access to Masimo Information
APPENDIX 41 We Strongly Believe Politan is Providing Inaccurate and Incomplete Information Politan’s Claims Regarding Access to Masimo Information “In late 2023, the 2023 Newly - Elected Directors began asking to see a draft budget for FY 2024 so that the Board could review and comment prior to bein
Slide 42: Claims Regarding Decision to Pursue Consumer Separation
APPENDIX 42 We Strongly Believe Politan is Providing Inaccurate and Incomplete Information Politan’s Claims Regarding the Board’s Decision to Pursue a Separation of the Consumer Business “Kiani then revived the idea proposed by Politan nearly a year earlier to separate the consumer business from the
Slide 43: Politan's Claims Regarding Additional Matters
APPENDIX 43 We Strongly Believe Politan is Providing Inaccurate and Incomplete Information Politan’s Claims Regarding Additional Matters “In an effort to facilitate a more collaborative boardroom dynamic, on August 28, 2023, Politan , through counsel, informed Masimo that it and the California State
Slide 44: Enhancing Our Compensation Program
Compensation Best Practices APPENDIX 44 We Remain Focused on Enhancing our Compensation Program Following Extensive Stockholder Engagement Our Board believes in the importance of being responsive to stockholder feedback – we continue to make meaningful progress in ensuring we have a strong executive
Slide 45: GAAP to Non-GAAP Reconciliation: Gross Profit
45 (Unaudited; in millions, except per share data) (1),(3) Quarter to Date Q2 2024 Guidance (2) Full Year FY 2024 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Low High FY 2022 FY 2023 Low High GAAP revenue $304.2 $565.3 $549.3 $617.0 $565.0 $455.3 $478.9 $548.
Slide 46: Consolidated Income Statement
46 Consolidated Income Statement (Unaudited; in millions, except per share data) (1),(3) Quarter to Date Q2 2024 Guidance (2) Full Year FY 2024 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Low High FY 2022 FY 2023 Low High GAAP non-operating income (expense) (
Slide 47: Revenue
47 Revenue (Unaudited; in millions, except percentages) (1,3) Quarter to Date Q2 2024 Guidance (2) Full Year FY 2024 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Low High FY 2022 FY 2023 Low High Revenue Healthcare 304.2 357.0 327.2 351.9 346.7 281.1 307.8 339
Slide 48: Segment Reporting
48 Segment Reporting (Unaudited; in millions) (1) Quarter to Date Q2 2024 Guidance (2) Full Year FY 2024 Guidance (2) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Low High FY 2022 FY 2023 Low High Revenue Healthcare 304.2 357.0 327.2 351.9 346.7 281.1 307.8 339.9 339.6 330