Edwards Lifesciences Corporation · NYSE:EW
Edwards Lifesciences — 2020 Edwards Lifesciences Virtual Investor Conference
23 slides from Edwards Lifesciences's conference presentation, Dec 10, 2020
Slide 1: Financial Outlook
Financial Outlook Scott Ullem Chief Financial Officer
Slide 2: Edwards has delivered strong financial performance
Edwards has delivered strong financial performance STRONG SALES GROWTH EXCEEDING MEDTECH SECTOR ROBUST CASH FLOW Long-Term HEALTHY GROSS AND DISCIPLINED PROFIT AND CAPITAL Shareholder OPERATING DEPLOYMENT Returns MARGINS 12/10/2020 2
Slide 3: Edwards Financial Objectives
Edwards Financial Objectives STRONG SALES GROWTH EXCEEDING MEDTECH SECTOR • Sales growth fueled by successful long-term investments in R&D and advancements of breakthrough innovations Long-Term Shareholder • Sustained leadership position Returns supported by strong evidence base of value to patients
Slide 4: COVID significantly impacted 2020 financial performance
COVID significantly impacted 2020 financial performance (Excludes special items; $ in millions except earnings per share) Adjusted Item 2019 Investor Conference October Guidance Year-over-year growth Sales $4,500-5,000 below plan FX Impact on Sales ~$(40) Neutral impact (~1% downside to sales) Gross
Slide 5: 2020 Sales Guidance Comparison
2020 Sales Guidance Comparison Total company year-over-year Q4 growth rate trending lower than Q3 due to COVID 2019 Investor Conference Current Guidance Transcatheter Aortic Valve Higher End 12-15% (5%)-5% Replacement Transcatheter Mitral & Tricuspid $50-$70M Around $40M Therapies Surgical Structura
Slide 6: Mid-teens sales growth expected in 2021
Mid-teens sales growth expected in 2021 (Adjusted sales $ in billions; underlying growth rates) 2021 EXPECTATIONS • Hospitals continue to face headwinds from COVID Mid- teens • Growth in all regions with 15% expectations for interruptions 10% due to COVID 16% 18% $4.9-5.3 • FX impact expected to be
Slide 7: 2021 Sales Guidance – Product Group
2021 Sales Guidance – Product Group ($ in millions at current exchange rates) Underlying Sales Transcatheter Aortic Valve Replacement $3,200-3,600 (Underlying growth 15-20%) Transcatheter Mitral & Tricuspid Therapies ~$80 (Approximately 2x 2020) Surgical Structural Heart $800-900 Critical Care $725-
Slide 8: 2021 Guidance Assumptions
2021 Guidance Assumptions • COVID continues to stress the global healthcare system • COVID impact lessens after winter flu season • Effective vaccine becomes widely available by mid-2021 • Hospitals continue to improve ability to treat structural heart patients 12/10/2020 8
Slide 9: TAVR to return to double-digit sales growth in 2021
TAVR to return to double-digit sales growth in 2021 (Adjusted sales $ in millions; underlying growth rates) 2021 HIGHLIGHTS • Procedure growth driven by improved TAVR adoption • EARLY TAVR enrollment 15-20% Higher end complete (5%) - 5% 21% • FDA approval to start Moderate AS pivotal trial 12% 24% $
Slide 10: TMTT has strong momentum going into 2021
TMTT has strong momentum going into 2021 (Adjusted sales $ in millions) 2021 HIGHLIGHTS • Doubling 2020 global revenue led by PASCAL and PASCAL Ace for both mitral and tricuspid patients • Enrolling 5 pivotal studies: SAPIEN M3 (ENCIRCLE); EVOQUE TR (TRISCEND II); ~$80 and PASCAL (CLASP IID, IID, an
Slide 11: Surgical Structural Heart brings leading innovation
Surgical Structural Heart brings leading innovation (Adjusted sales $ in millions; underlying growth rates) 2021 HIGHLIGHTS • Drive adoption of our RESILIA products, INSPIRIS and KONECT • INSPIRIS China launch (15%) – (5%) 3% 2% 4% • MITRIS US and Japan launch (2%)* • HARPOON U.S. pivotal trial enro
Slide 12: Critical Care shifting focus to Smart Recovery
Critical Care shifting focus to Smart Recovery (Adjusted sales $ in millions; underlying growth rates) 2021 HIGHLIGHTS • Drive growth with capital equipment and Smart Recovery products (5%) – 0% • Focus on advancing Smart 9% 11% Recovery and improving 8% quality of care with the 5% expansion of HPI
Slide 13: 2021 Product Group Milestones
2021 Product Group Milestones TAVR TMTT • Procedure growth driven by improved TAVR adoption • Double 2020 global revenue led by PASCAL and PASCAL Ace for both mitral and tricuspid patients • EARLY TAVR enrollment complete • Enrolling 5 pivotal studies • FDA approval to start Moderate AS pivotal trai
Slide 14: Edwards Financial Objectives
Edwards Financial Objectives HEALTHY PROFITABILITY • Generating strong gross profit and operating margins • Funding growing field organization and strengthening global supply Long-Term chain Shareholder Returns • Investing aggressively for profitable organic growth • Maintaining efficient tax struct
Slide 15: 2021 Gross Profit Margin Outlook
2021 Gross Profit Margin Outlook Year-over-Year Mix benefit from TAVR growth Sales Mix + Some lower-volume new product margins below the corporate average Modest price compression driven by volume discounts Creating business continuity across our global manufacturing network +/– Optimizing Increasin
Slide 16: Plan to invest aggressively in 2021 for future growth despite expected COVID disruptions
Plan to invest aggressively in 2021 for future growth despite expected COVID disruptions R&D SG&A • TAVR and TMTT investments • Continuing to support high-touch focused on developing new model for U.S. TAVR technologies and generating evidence to expand indications • Ongoing build-out of commercial
Slide 17: Operating performance drives adjusted EPS growth
Operating performance drives adjusted EPS growth (at current rates) (at current rates) 12/10/2020 17
Slide 18: Edwards Financial Objectives
Edwards Financial Objectives ROBUST CASH FLOW AND DISCIPLINED CAPITAL DEPLOYMENT • Enables aggressive R&D investments • Internal growth supplemented by smaller strategic acquisitions Long-Term Shareholder • Investing in expanding global Returns capacity • Commitment to returning capital to sharehold
Slide 19: Cash Flows and Capital Deployment
Cash Flows and Capital Deployment 2016 - 2019 2021 HIGHLIGHTS • Continued growth results in significant cash flows that fund $2.5B future internal and external Share Repurchases opportunities Nearly $4B funded $0.8B CAPEX • 2021 capital expenditures expected around $350 million as capacity expansion
Slide 20: 2021 Guidance Summary
2021 Guidance Summary (Excludes special items; $ and shares in millions except earnings per share) Adjusted Item FY 2021 Adjusted Item FY 2021 Sales $4,900-5,300 Operating Margin 29-30% Underlying growth Mid-teens Tax rate 11-15% (~5pp ETB benefit) FX Impact on Sales ~$35 Earnings Per Share $2.00-$2
Slide 21: Longer-Term Guidance
Longer-Term Guidance Underlying Sales Growth Innovation expected to drive organic growth that exceeds medtech sector Gross Margin Mix and efficiencies expected to benefit longer-term margin Significant investments in clinical trials to expand indications and develop new R&D % of Sales technologies D
Slide 22: Edwards Financial Objectives
Edwards Financial Objectives Long-Term Shareholder Returns 12/10/2020 22
Slide 23: | PE TN
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