Medtronic Plc. · NYSE:MDT
Medtronic — Q4 FY16 Earnings Presentation
21 slides from Medtronic's earnings presentation, May 31, 2016
Slide 1: Medtronic plc Q4 FY16 Earnings Presentation
MEDTRONIC PLC Q4 FY16 EARNINGS PRESENTATION MAY 31, 2016 • CONSOLIDATED RESULTS & GROUP REVENUE HIGHLIGHTS • EPS GUIDANCE, REVENUE OUTLOOK, & OTHER ASSUMPTIONS • FY17 REVENUE REPORTING CHANGES Exhibit 99.2
Slide 2: Forward Looking Statements
Q4 FY16 Earnings Results | May 31, 2016 | 2 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements which provide current expectations or forecasts, including those relating to market and sales growth, growth strategies, financial results, use of free cash flow, product deve
Slide 3: Consolidated Results & Group Revenue Highlights
CONSOLIDATED RESULTS & GROUP REVENUE HIGHLIGHTS
Slide 4: Q4 FY16 Highlights
Q4 FY16 Earnings Results | May 31, 2016 | 4 Strong 6% revenue growth; continuing to outperform the market • Upper end of our MSD goal, and ahead of Q4 outlook • Solid performances in Diabetes, CVG, and MITG, more than offset challenges in certain RTG businesses • Executing on three revenue growth
Slide 5: MDT Q4 FY16 GAAP Select Financial Information
Q4 FY16 Earnings Results | May 31, 2016 | 5 MDT Q4 FY16 GAAP SELECT FINANCIAL INFORMATION Q4 FY16 Q4 FY15 Y/Y Growth / Y/Y Change Net Sales ($M) 7,567 7,304 4% Gross Margin 68.8% 59.8% 900 bps SG&A ($M) 2,360 2,404 2% % of Sales 31.2% 32.9% 170 bps R&D ($M) 575 528 (9%) % of Sales 7.6% 7.2% (40 bps)
Slide 6: MDT Q4 FY16 Non-GAAP Select Financial Information
Q4 FY16 Earnings Results | May 31, 2016 | 6 MDT Q4 FY16 NON-GAAP SELECT FINANCIAL INFORMATION Q4 FY16 Q4 FY15 Y/Y Growth / Y/Y Change FX Impact $M / Change CC Adjusted1 CC Growth / Change1 Net Sales ($M) 7,567 7,304 4% (179) -- 6% Gross Margin1 68.8% 69.6% (80 bps) (100 bps) 69.8% 20 bps SG&A ($M) 2
Slide 7: MDT Q4 FY16 Unplanned Impacts to Margins
Q4 FY16 Earnings Results | May 31, 2016 | 7 MDT Q4 FY16 UNPLANNED IMPACTS TO MARGINS Q4 FY16 Non-GAAP Bellco Scrap & Obsol. FX on Inventory Q4 FY16 Adjusted Non-GAAP Gross Margin 68.8% 20 bps 20 bps 30 bps 69.5% SG&A % of sales 31.2% -- -- -- 31.2% Y/Y Growth CC 180 bps -- -- -- 180 bps Operating Ma
Slide 8: MDT Q4 FY16 Y/Y Margin Changes
Q4 FY16 Earnings Results | May 31, 2016 | 8 MDT Q4 FY16 Y/Y MARGIN CHANGES 58.0% 63.0% 68.0% 73.0% Q4 FY15, GAAP Non-GAAP Adjustments Q4 FY15, Non-GAAP Performance Q4 FY16, CC FX Q4 FY16, Non-GAAP Non-GAAP Adjustments Q4 FY16, GAAP 69.8% (1.0%) 68.8% 0.0% 10.0% 20.0% 30.0% Q4 FY15, GAAP Non-GAAP Adj
Slide 9: MDT FY16 GAAP Select Financial Information
Q4 FY16 Earnings Results | May 31, 2016 | 9 MDT FY16 GAAP SELECT FINANCIAL INFORMATION FY16 FY15 Y/Y Growth / Y/Y Change Net Sales ($M) 28,833 20,261 42% Gross Margin 68.3% 68.9% (60 bps) SG&A ($M) 9,469 6,904 (37%) % of Sales 32.8% 34.1% 130 bps R&D ($M) 2,224 1,640 (36%) % of Sales 7.7% 8.1% 40 bp
Slide 10: MDT FY16 Non-GAAP Select Financial Information
Q4 FY16 Earnings Results | May 31, 2016 | 10 MDT FY16 NON-GAAP SELECT FINANCIAL INFORMATION FY162 FY153 Y/Y Growth / Y/Y Change FX Impact $M / Change CC Adjusted CC Growth / Change1 Net Sales ($M) 28,833 28,242 2% (1,502) -- 7% Gross Margin1 69.1% 70.3% (120 bps) (120 bps) 70.3% 0 bps SG&A ($M) 9,46
Slide 11: MDT FY16 Y/Y Margin Changes
Q4 FY16 Earnings Results | May 31, 2016 | 11 MDT FY16 Y/Y MARGIN CHANGES 60.0% 65.0% 70.0% 75.0% FY15, GAAP Non-GAAP Adjustments To Align MDT & COV FY15, Non-GAAP Combined MDT & COV Performance FY16, CC FX FY16, Non-GAAP Non-GAAP Adjustments FY16, GAAP 70.3% 70.3% - (1.2%) 69.1% 15.0% 20.0% 25.0% 30
Slide 12: CVG Q4 FY16 Highlights
Q4 FY16 Earnings Results | May 31, 2016 | 12 CVG Q4 FY16 HIGHLIGHTS CRHF 54% CSH 30% APV 16% U.S. 52% Non- U.S. Dev 33% EM 15% Cardiac Rhythm & Heart Failure (CRHF) KEY PERFORMANCE DRIVERS1 High Power – MSD • Highest US share since Q4FY10 • ICDs: MSD growth – US Evera MRI™, • Visia AF™ single-cham
Slide 13: MITG Q4 FY16 Highlights
Q4 FY16 Earnings Results | May 31, 2016 | 13 MITG Q4 FY16 HIGHLIGHTS Surgical Solutions KEY PERFORMANCE DRIVERS1 Above Market Growth in Surgical Solutions; LSD PMR Growth Patient Monitoring & Recovery (PMR) Advanced Surgical – LDD • Focused on sustainable, long-term surgical market leadership, by i
Slide 14: RTG Q4 FY16 Highlights
Q4 FY16 Earnings Results | May 31, 2016 | 14 RTG Q4 FY16 HIGHLIGHTS Spine 39% NM 26% ST 26% NV 9% US 67% Non-US Dev 23% EM 10% KEY PERFORMANCE DRIVERS1 Strong NV & ST Growth and Improved Spine Growth; Offsets Declines in Neuromodulation Drug Pump – LDD Decline • Continued challenges based on the FD
Slide 15: Diabetes Q4 FY16 Highlights
Q4 FY16 Earnings Results | May 31, 2016 | 15 DIABETES Q4 FY16 HIGHLIGHTS US 59% Non-US Dev 34% EM 7% KEY PERFORMANCE DRIVERS1 Intensive Insulin Management (IIM) Strong, Broad-Based Performance Across All Three Divisions MiniMed ® 530G MiniMed® Connect 15 Total Group Revenue $496M Revenue $M As Rep Y
Slide 16: FY17 EPS Guidance, Revenue Outlook, & Other Assumptions
FY17 EPS GUIDANCE, REVENUE OUTLOOK, & OTHER ASSUMPTIONS
Slide 17: MDT FY17 EPS Guidance, Revenue Outlook & Other Assumptions
Q4 FY16 Earnings Results | May 31, 2016 | 17 MDT FY17 EPS GUIDANCE, REVENUE OUTLOOK & OTHER ASSUMPTIONS FY17 Q1 FY17 Revenue Growth Outlook – CC1 5% - 6% Lower half of annual range Revenue Growth – Reported2 3% - 4.5% Currency Impact -$25 to -$75M -$25 to -$75M CVG MSD MITG MSD RTG Low-end of MSD Di
Slide 18: FY17 Revenue Reporting Changes
FY17 REVENUE REPORTING CHANGES
Slide 19: MDT FY17 Revenue Reporting Changes
Q4 FY16 Earnings Results | May 31, 2016 | 19 MDT FY17 REVENUE REPORTING CHANGES RTG – Prior View Neuromodulation Surgical Technologies Spine Neurovascular Core Spine Interventional Spine BMP Kanghui Pain (SCS/Pumps) DBS Gastro/Uro (GU) ENT Neurosurgery Advanced Energy Neurovasc
Slide 20: MDT Reporting Changes: Restated Historical Revenue
Q4 FY16 Earnings Results | May 31, 2016 | 20 MDT REPORTING CHANGES: RESTATED HISTORICAL REVENUE Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 FY16 Restorative Therapies Group 1,802 1,764 1,753 1,869 7,188 Spine 685 649 636 659 2,629 Brain Therapies 462 475 483 538 1,958 Pain Therapies 309 293 279 301 1,182 Specia
Slide 21: Appendix: Acronyms / Abbreviations
Q4 FY16 Earnings Results | May 31, 2016 | 21 APPENDIX ACRONYMS / ABBREVIATIONS 1 Growth DD Double Digits HSD High-Single Digit LDD Low-Double Digits LSD Low-Single Digit MSD Mid-Single Digit Other ASP Average Selling Price Bps Basis Points CC Constant Currency Dev Developed EM Emerging Markets EMEA