Edwards Lifesciences Corporation · NYSE:EW
Edwards Lifesciences — 2021 Edwards Lifesciences Investor Conference
26 slides from Edwards Lifesciences's conference presentation, Dec 8, 2021
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 Sales Growth Profitability Capital Allocation Strong sales growth Healthy gross profit and Balance sheet management and exceeding medtech sector operating margins disciplined capital deployment Long-Term Shareholder Returns 12/8/2021 2
Slide 3: Edwards Financial Objectives: Strong Sales Growth
Edwards Financial Objectives STRONG SALES GROWTH EXCEEDING MEDTECH SECTOR Sales growth fueled by successful long-term investments in R&D and advancements of focused breakthrough therapies Sustained leadership position supported Sales Growth by strong evidence-based value to patients and clinicians a
Slide 4: Delivering strong 2021 performance despite COVID impact
Delivering strong 2021 performance despite COVID impact ($ in millions except earnings per share) 2020 Investor Conference October Guidance (Unchanged) Sales $4,900 - 5,300 $5,200 - 5,400 FX Impact on Sales ~$35 ~$70 (~1% upside to sales) (~1.5% upside to sales) Adjusted Gross Profit Margin 76-77% 7
Slide 5: 2021 Sales Guidance – Product Group
2021 Sales Guidance – Product Group ($ in millions) 2020 Investor Conference October Guidance (Unchanged) Transcatheter Aortic Valve $3,200 - 3,600 $3,400 - 3,600 Replacement Transcatheter Mitral & ~$80 $80 - 100 Tricuspid Therapies Surgical Structural Heart $800 - 900 $875 - 925 Critical Care $725
Slide 6: Low double-digit sales growth expected in 2022
Low double-digit sales growth expected in 2022 ▪ Gradual COVID recovery and assumes no significant impact from new variants ▪ Growth across all major regions ▪ FX impact expected to be approximately $120 million or 2% downside to reported sales at current rates ▪ Expect high variability in year-over
Slide 7: TAVR sustains double-digit sales growth in 2022
TAVR sustains double-digit sales growth in 2022 ▪ Double-digit growth across all major regions ▪ Anticipated stable ASP and share position ▪ Q2 expiration of ~$40M annual royalty revenue Around 12 - 15% 20% $3.7 - 4.0 2022 $2.7 $2.9 $3.4 - 3.6 Expectations 2019 2020 2021E 2022E $ in billions; underl
Slide 8: TMTT continues strong momentum
TMTT continues strong momentum ▪ Remain focused on excellent patient outcomes ▪ PASCAL expansion in Europe drives growth ▪ PASCAL in the U.S. and EVOQUE TR in Europe approved late 2022 with negligible impact on 2022 sales ▪ Build enrollment in ENCIRCLE, TRISCEND II, and MISCEND trials $140 - 170 202
Slide 9: Surgical Structural Heart brings leading innovations
Surgical Structural Heart brings leading innovations ▪ Increased adoption of RESILIA products drives growth ▪ MITRIS U.S. launch ▪ Ongoing mechanical to tissue valve conversion Mid single-digits Mid-teens 2022 $842 $875 - 925 $870 - 950 $762 Expectations 2019 2020 2021E 2022E $ in millions; underlyi
Slide 10: Critical Care shifting focus to Smart Recovery
Critical Care shifting focus to Smart Recovery ▪ Accelerated adoption of Smart Recovery and the expansion of HPI technology ▪ Launch Viewfinder connectivity solution ▪ Advance Smart BP enrollment Mid single-digits Low double-digits 2022 $740 $725 $800 - 850 $820 - 900 Expectations 2019 2020 2021E 20
Slide 11: Edwards has delivered strong financial performance
Edwards has delivered strong financial performance Sales Growth Profitability Capital Allocation Strong sales growth Healthy gross profit and Balance sheet management and exceeding medtech sector operating margins disciplined capital deployment Long-Term Shareholder Returns 12/8/2021 11
Slide 12: Edwards Financial Objectives: Healthy Profitability
Edwards Financial Objectives HEALTHY PROFITABILITY Generating strong gross profit Funding growing field organization and strengthening global supply chain Profitability Investing aggressively in innovation for profitable organic growth Maintaining efficient tax structure 12/8/2021 12
Slide 13: 2022 Gross Profit margin favorably impacted by FX
2022 Gross Profit margin favorably impacted by FX GROSS PROFIT MARGIN Between 78 - 79% + - ▪ FX impact ▪ Investments in manufacturing capacity ▪ Operational efficiencies ▪ Expiration of TAVR royalty ▪ Product mix 12/8/2021 13
Slide 14: 2022 Operating Expenses
2022 Operating Expenses OPEX SG&A: 28 - 30%; R&D: 17 - 18% + - ▪ FX impact ▪ TMTT U.S. launch ▪ Leveraging scale ▪ Investments in clinical trials and product development ▪ Nominal impact from inflation ▪ Normalization of pre-COVID activities 12/8/2021 14
Slide 15: Expanding Operating Margin in 2022
Expanding Operating Margin in 2022 Gross Profit Margin Selling General and Research & Adjusted Gross Profit Administrative Development margin forecast 78 - 79%, Continuing to support Targeted investments lifted primarily by foreign high-touch model for to continue profitable exchange TAVR and ongoin
Slide 16: Operating performance drives Adjusted EPS growth
Operating performance drives Adjusted EPS growth $2.50 - 2.65 $0.01 - 0.03 $0.29 - 0.36 $(0.02 - 0.04) High-end of $0.41 - 0.43 $0.00 - 0.01 $2.07 - 2.27 $(0.02 - 0.03) $1.86 2020 Operating FX Tax/Shares 2021 October Operating FX Tax/Shares 2022 Actual Performance Impact Impact Guidance Performance
Slide 17: Edwards has delivered strong financial performance
Edwards has delivered strong financial performance Sales Growth Profitability Capital Allocation Strong sales growth Healthy gross profit and Balance sheet management and exceeding medtech sector operating margins disciplined capital deployment Long-Term Shareholder Returns 12/8/2021 17
Slide 18: Edwards Financial Objectives: Capital Deployment
Edwards Financial Objectives ROBUST CASH FLOW AND DISCIPLINED CAPITAL DEPLOYMENT Supports global capacity expansion Strategic acquisitions to support and Capital Allocation supplement R&D initiatives Returning capital to shareholders through opportunistic share repurchases 12/8/2021 18
Slide 19: Cash Flow and Capital Deployment
Cash Flow and Capital Deployment ▪ Continued growth results in significant cash flows that fund future internal and external opportunities ▪ EPS model expects diluted shares outstanding between 630 and 635 million ▪ Includes ~$200M of accelerated tax payments starting in 2022 due to change in tax tr
Slide 20: Investing Capital for the Future
Investing Capital for the Future Other Research Capacity Manufacturing $407 Resiliency Infrastructure ~$350 Investment $254 2019 2020 2021E CAPEX ($ in millions) Where are we investing? 12/8/2021 20
Slide 21: Acquisitions & Divestitures
Acquisitions & Divestitures FOCUS CLOSED TRANSACTIONS SINCE 2016 • Structural heart • Smaller tuck-ins • Early-stage, pre-revenue companies Acquisitions & Options to Aquire 7 • Strategic fit Minority Investments 23 EXIT IP Purchases & Other 17 • Non-strategic products • Low growth potential 12/8/202
Slide 22: 2022 Guidance Summary
2022 Guidance Summary ($ and shares in millions except earnings per share) Expansion to Sales $5,500 - 6,000 Operating Margin* 31 - 34% Underlying growth Low double-digits Tax rate* 11 - 15% (~3pp ETB benefit) FX Impact on Sales ~($120) Earnings Per Share* $2.50 - 2.65 (2% downside to sales) Gross P
Slide 23: Global Market Opportunity
Global Market Opportunity TAVR SURGICAL ▪ Greater awareness By 2028 By 2028 ▪ RESILIA adoption Today Today ▪ Indication and geographic ▪ Mitral opportunity $5B expansion $10B $2B ▪ Emerging markets $1.5B ▪ New technologies Nearly $20B TMTT CRITICAL CARE Today ▪ Differentiated portfolio By 2028 ▪ Shi
Slide 24: Longer-Term Guidance
Longer-Term Guidance SALES GROWTH OPERATING EFFICIENCY EARNINGS Underlying Sales Growth Gross Profit Margin Tax Rate ▪ Innovation expected to drive organic ▪ Mix and efficiencies expected to ▪ Upward pressure growth that exceeds medtech sector benefit longer-term margin SG&A Earnings Per Share Globa
Slide 25: Edwards' plan generates strong financial performance
Edwards' plan generates strong financial performance Sales Growth Profitability Capital Allocation Strong sales growth Healthy gross profit and Balance sheet management and exceeding medtech sector operating margins disciplined capital deployment Long-Term Shareholder Returns 12/8/2021 25
Slide 26: Trademark notice
Edwards, Edwards Lifesciences, the stylized E logo, ENCIRCLE, HPI, Life is Now, MISCEND, MITRIS, PASCAL, RESILIA, TRISCEND, and Viewfinder. All other trademarks are the property of their respective owners. © 2021 Edwards Lifesciences Corporation. All rights reserved.
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