Slide 1: Teleflex Incorporated Fourth Quarter 2020 Earnings Conference Call
Teleflex Incorporated Fourth Quarter 2020 Earnings Conference Call 1
Slide 2: Conference Call Logistics
Conference Call Logistics The release, accompanying slides, and replay webcast are available online at www.teleflex.com (click on “Investors”) Telephone replay is available by dialing (855) 859-2056 or for international calls, (404) 537-3406, pass code number 8789956 2
Slide 3: Today's Speakers
Today’s Speakers Liam Kelly Chairman, President and CEO Thomas Powell Executive VP and CFO Jake Elguicze Treasurer and VP, Investor Relations 3
Slide 4: Note on Forward-Looking Statements and Non-GAAP Financial Measures
Note on Forward-Looking Statements This presentation contains forward-looking statements, including, but not limited to, the UroLift® 2 System remaining on track for commercialization in Japan and our related expectation with respect to reimbursement occurring in 2021; our estimates with respect to
Slide 5: Executive Overview
Executive Overview Liam Kelly Chairman, President and CEO 5
Slide 6: Q4 2020 Highlights
Q4 2020 Highlights • Sequential improvement in Q4'20 constant currency revenue, adjusted gross and operating margin, and adjusted EPS, as compared to Q2’20 and Q3’20 Q4 Summary • Q4’20 revenue and adjusted earnings per share were significantly better than internal expectations • Closed on agreement
Slide 7: Q4'20 and FY 2020 Financial Results
Q4'20 and FY 2020 Financial Results Revenue Highlights • Q4'20 as reported revenue increased 4.4% versus Q4'19 • Q4'20 constant currency revenue increased 2.3% versus Q4'19 • COVID-19 had an estimated net negative impact of approximately $61 million, or ~9% on Q4'20 revenue • FY20 constant currency
Slide 8: Q4'20 Segment Revenue Review
Q4'20 Segment Revenue Review Reported Constant Estimated Dollars in Q4'20 Q4'19 Currency Revenue Currency COVID-19 Millions Revenue Revenue Impact Growth Growth Impact Americas $419.5 $400.0 4.9% (0.1)% 5.0% (~7%) EMEA $161.4 $145.9 10.6% 6.5% 4.1% (~1%) Asia $78.6 $80.5 (2.3)% 4.9% (7.2)% (~12%) OE
Slide 9: Q4'20 Global Product Category Revenue Review
Q4'20 Global Product Category Revenue Review Reported Constant Estimated Dollars in Q4'20 Q4'19 Currency Revenue Currency COVID-19 Millions Revenue Revenue Impact Growth Growth Impact Vascular Access $182.5 $154.6 18.0% 2.0% 16.0% ~5% Interventional $106.7 $112.7 (5.3)% 1.6% (6.9)% (~12%) Anesthesia
Slide 10: Clinical and Commercial Updates: UroLift System
Clinical and Commercial Updates Interventional Urology - UroLift® System KEY TAKEAWAYS Successful Pilot National DTC Campaign ◦ Doubled brand awareness for targeted men w/ BPH (from 5% to 10%) ◦ 100%+ increase in website traffic ◦ ROI exceeded internal expectations UroLift® 2 System Commercial Progr
Slide 11: Clinical and Commercial Updates: UroLift PUL vs. Medical Therapy
Clinical and Commercial Updates Interventional Urology - UroLift® System KEY TAKEAWAYS Comparative analysis1 of PUL vs. Medical Therapy Published ◦ Comparative analysis of sexual function outcomes from PUL studies and the Medical Therapy of Prostatic Symptoms (MTOPS) trial ◦ Indirect comparison reve
Slide 12: Clinical and Commercial Updates: CTO-PCI Study
Clinical and Commercial Updates Interventional - CTO-PCI Study KEY TAKEAWAYS CTO-PCI IDE Study ◦ Completed patient enrollment of a prospective, single-arm IDE study ◦ Enrolled 150 patients across 13 investigational sites in the US to evaluate the performance of Teleflex coronary guidewires and speci
Slide 13: Clinical and Commercial Updates: Anesthesia - Freeze Dried Plasma
Clinical and Commercial Updates Anesthesia – Freeze Dried Plasma KEY TAKEAWAYS Freeze Dried Plasma Biologics License Application (BLA) was submitted to the (Packaged with components necessary for reconstitution) FDA during Q1’21 ◦ Submission is eligible for priority review and accelerated approval ◦
Slide 14: Acquisition Update: Acquires Z-Medica, LLC
Acquisition Update Acquires Z-Medica, LLC KEY TAKEAWAYS Market Leader in hemostatic products ◦ Provides three highly complementary, differentiated capability platforms, including: ▪ QuikClot® hemostatic devices contain kaolin, proven to accelerate natural clotting cascade and stop bleeding fast . ▪
Slide 15: Financial Overview
Financial Overview Thomas Powell Executive VP and CFO 15
Slide 16: Q4'20 Financial Review
Q4'20 Financial Review Global revenue generation of $711.2 million • Revenue increased 4.4% vs. prior year period on an as-reported basis • Revenue increased 2.3% vs. prior year period on a constant currency basis Gross margin performance • GAAP gross margin of 53.9%, down 160 bps vs. prior year per
Slide 17: Key Assumptions for 2021 Financial Guidance
Key Assumptions for 2021 Financial Guidance Outlook Includes: • Due to COVID-19 resurgences globally, we expect disruption to continue during 1H, and expect marked improvement moving throughout 2021 • Q2 growth should be partly driven by relatively easy year-over-year comparisons • Health care syste
Slide 18: 2021 Revenue Guidance
2021 Revenue Guidance 2021 constant currency revenue growth drivers include continued expected recovery in Interventional Urology, Interventional, and Surgical products; as well as contribution from Z-Medica acquisition 18
Slide 19: 2021 Adjusted Gross Margin Guidance
2021 Adjusted Gross Margin Guidance 60% +130 bps to +230 bps 2021 Adj. Gross Margin Drivers 58% Gross margin expansion in 2021 as compared -140 bps to 2020 expected to be driven by: 58.0% to 56% 59.0% • Higher margin Interventional Urology, Interventional Access, and Surgical product mix • Manufactu
Slide 20: 2021 Adjusted Operating Margin Guidance
2021 Adjusted Operating Margin Guidance 28% 2021 Adj. Operating Margin Drivers +110 bps to +210 bps Operating margin expansion in 2021 as 26% compared to 2020 expected to be driven by: -90 bps • Gross margin expansion 26.0% to • Z-Medica acquisition 27.0% 24% Near-term operating margin expansion off
Slide 21: 2021 Adjusted EPS Guidance
2021 Adjusted EPS Guidance 2021 adjusted EPS growth is expected to be between 17.2% and 19.0% 2021 Guidance Low High 2020 Adjusted Earnings per Share $10.67 $10.67 Operations $1.58 $1.66 Foreign currency exchange rates $0.35 $0.35 Z-Medica $0.21 $0.26 Interest Expense $0.17 $0.19 Weighted average sh
Slide 22: Key Takeaways
Key Takeaways ◦ Teleflex delivered solid underlying performance in the fourth quarter, and fiscal year, 2020 ◦ Deployed capital for an exciting hemostat acquisition which is expected to improve company's weighted average market growth rate and margin profile ◦ Expect more normalized growth in 2H of
Slide 23: Thank You
23 Veleflex:
Slide 24: Appendices
Appendices Veleflex:
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures The presentation to which these appendices are attached and the following appendices include, among other things, tables reconciling the following applicable non-GAAP financial measures to the most comparable GAAP financial measure: • Constant currency revenue growth. Thi
Slide 26: Non-GAAP Adjustments
Non-GAAP Adjustments The following is an explanation of certain of the adjustments that are applied with respect to one or more of the non-GAAP financial measures that appear in the presentation to which these appendices are attached: Restructuring, restructuring related and impairment items - Restr
Slide 27: Appendix A – Reconciliation of Adjusted Gross and Operating Margin, Income Tax and EPS
Appendix A – Reconciliation of Adjusted Gross and Operating Margin, Income Tax and EPS (Dollars in millions, except per share data) Three Months Ended December 31, 2020 Three Months Ended December 31, 2019 Diluted Income Diluted Gross Operating Income Before Income Tax Income Gross Operating Income
Slide 28: Appendix A tickmarks
Appendix A tickmarks A. Restructuring, restructuring related and impairment items – For the three months ended December 31, 2020, pre-tax restructuring charges were $0.4 million, pre-tax restructuring related charges were $7.5 million, and pre-tax impairment charges were $21.4 million . For the thre
Slide 29: Appendix B – Restructuring and Similar Cost Savings Initiatives Summary
Appendix B – Restructuring and Similar Cost Savings Initiatives Summary During the second quarter of 2020, we committed to a workforce reduction (the "2020 Workforce reduction plan") designed to improve profitability and reduce cost primarily by streamlining certain sales and marketing functions in
Slide 30: Appendix B – Footnotes
Appendix B – Footnotes (1) Represents charges that are directly related to restructuring programs and principally constitute costs to transfer manufacturing operations to existing lower-cost locations, project management costs and accelerated depreciation, as well as a charge that is expected to be
Slide 31: Appendix C – Year-to-Date GPO and IDN Review
Appendix C – December 31, 2020 Year-to-Date GPO and IDN Review Group Purchasing Organization Update Q1’20 Q2’20 Q3’20 Q4'20 Renewed agreements 2 8 8 6 New agreements 1 0 4 6 Existing agreements lost 0 0 1 0 IDN Update Q1’20 Q2’20 Q3’20 Q4'20 Renewed agreements 6 2 11 6 New agreements 7 6 4 10 Existi
Slide 32: Appendix D - 2021 Adj. Gross and Operating Margin Guidance Reconciliation
Appendix D - 2021 Adj. Gross and Operating Margin Guidance Reconciliation 2021 Guidance Low High Forecasted GAAP Gross Margin 53.85% 55.00% Estimated restructuring, restructuring related and impairment items 0.90% 0.85% Estimated acquisition, integration, and divestiture related items 0.15% 0.10% Es
Slide 33: Appendix E – Reconciliation of 2021 Adjusted Earnings Per Share Guidance
Appendix E – Reconciliation of 2021 Adjusted Earnings Per Share Guidance 2021 Guidance Low High Forecasted GAAP Diluted Earnings Per Share from continuing operations $8.15 $8.25 Estimated restructuring, restructuring related and impairment items, net of tax $0.60 $0.61 Estimated acquisition, integra
Slide 34: Appendix F – FY20 Segment Revenue Review
Appendix F – FY20 Segment Revenue Review Reported Constant Estimated Dollars in Currency Millions FY’20 FY’19 Revenue Impact Currency COVID-19 Growth Growth Impact Americas $1,465.0 $1,492.3 (1.8)% (0.2)% (1.6)% (~11%) EMEA $584.9 $588.1 (0.5)% 1.1% (1.6)% (~2%) Asia $267.0 $294.3 (9.3)% 0.3% (9.6)%
Slide 35: Appendix G – FY20 Global Product Category Revenue Review
Appendix G – FY20 Global Product Category Revenue Review Reported Constant Estimated Dollars in Currency Millions FY’20 FY’19 Revenue Impact Currency COVID-19 Growth Growth Impact Vascular Access $657.7 $600.9 9.5% 0.1% 9.4% ~3% Interventional $382.4 $427.6 (10.6)% 0.1% (10.7)% (~14%) Anesthesia $30
Slide 36: Appendix H – FY20 Financial Review
Appendix H – FY20 Financial Review Global revenue generation of $2.537 billion ◦ Decreased 2.2% vs. prior year period on an as-reported basis ◦ Decreased 2.4% vs. prior year period on a constant currency basis Gross margin performance ◦ GAAP gross margin of 52.2%, down 210 bps vs. prior year period