Slide 1: Investor Presentation Q2 2020
Investor Presentation Q2 2020 January 30, 2020
Slide 2: Presentation of financial information & forward-looking statements
Presentation of financial information & forward-looking statements Historical financial and operating data in this presentation reflect the consolidated results of ResMed Inc., its subsidiaries, and its legal entities, for the periods indicated. This presentation includes financial information prepa
Slide 3: Company Overview & Strategy
Company Overview & Strategy
Slide 4: Who we are / what we do
Who we are / what we do • Listed on NYSE & ASX, ~$23B market cap • World-leading connected health company with nearly 11 million 100% cloud-connectable devices – More than 12 million patients in AirView monitoring ecosystem – More than 90 million patient accounts in out-of-hospital care network • In
Slide 5: Why invest? – driving long-term shareholder value
Why invest? – driving long-term shareholder value Market Dynamics Growth & Innovation Financial Results • Underpenetrated markets in • Global leader in connected • Historical revenue and profit sleep and COPD health for sleep and growth • Healthcare costs continue to respiratory care • Recurring rev
Slide 6: ResMed 2025: a patient-centric, digitally-enabled strategy
ResMed 2025: a patient-centric, digitally-enabled strategy 250 million lives improved in out-of-hospital healthcare in 2025! Purpose Empower people to live happier, healthier and higher quality lives in the comfort of their home Growth Focus Global health epidemics in sleep apnea, COPD, other major
Slide 7: Our Business: Sleep
Our Business: Sleep
Slide 8: Sleep business strategy
Sleep business strategy Deliver a world-class patient experience through innovative solutions that lower overall costs for treating sleep apnea patients and improve clinical outcomes OPTIMIZE DELIVER BEST-IN- EMBRACE AND ENABLE EFFICIENCIES FOR CLASS PATIENT INTEGRATED CARE PROVIDERS EXPERIENCE MODE
Slide 9: What is sleep-disordered breathing?
What is sleep-disordered breathing? • Abnormal respiration during sleep – the cessation of breathing or “sleep suffocation” • Most prevalent is obstructive sleep apnea – collapse of the upper airway despite ongoing effort • Other types include central sleep apnea -- lack of breathing and lack of eff
Slide 10: Sleep apnea is more than 80% undiagnosed
Sleep apnea is more than 80% undiagnosed… ….and is highly prevalent in other chronic conditions Stroke1 72% Atrial Fibrillation4 74% Heart Failure5 76% Type 2 Diabetes2 Drug-Resistant Hypertension6 72% 83% Obesity3 77% 1 Peppard PE et al. Am J Epidemiol 2013 1 Johnson KG and Johnson DC. J Clin Sleep
Slide 11: The global prevalence of sleep apnea is enormous and growing
The global prevalence of sleep apnea is enormous and growing… AHI ≥ 5 AHI ≥ 15 Benjafield, et al. Lancet Respir Med 2019 936,360,689 424,630,028 © 2020 ResMed | 2Q20 Investor Presentation 11
Slide 12: Our partnerships will address sleep health as a public health crisis
Our partnerships will address sleep health as a public health crisis & Sleep research joint venture with Verily • Develop software solutions to help • To study the health and financial identify, diagnose, treat, and manage impacts of untreated sleep apnea those with OSA ‒ Prove the ROI for treating
Slide 13: Reducing mortality with PAP therapy
Reducing mortality with PAP therapy U.S. multicenter, population-based cohort study •Study included 392 patients with sleep apnea, with 11 years of follow-up •Positive airway pressure therapy associated with a 62% lower risk of all-cause mortality •Death rate was twice as high for persons who did no
Slide 14: Dose-response relationship between CPAP usage and lower healthcare costs
Demonstrated positive dose-response relationship between increased CPAP usage and lower healthcare costs For every one hour per night increase in PAP usage there was an 8% decrease in inpatient visits and a 4% decrease in overall acute care visits.1 Each 8% Hour 4% PAP Inpatient Overall Usage Visits
Slide 15: CPAP therapy effectiveness for mild obstructive sleep apnea
New study demonstrates the effectiveness of CPAP therapy and quality of life improvements for those with mild obstructive sleep apnea MERGE trial: clinical effectiveness of CPAP treatment in patients with mild obstructive sleep apnea • Demonstrated improvement in Quality of Life (SF-36 vitality scal
Slide 16: Transforming the treatment & management of sleep apnea
Transforming the treatment & management of sleep apnea Quiet Compact Comfortable Connected Minimalist Ultra Soft Small. Light. Simple. Patented memory foam offers unique comfort. Freedom Universal Fit Sleep in any position. Classic designs that fit nearly every face. © 2020 ResMed | 2Q20 Investor Pr
Slide 17: Our Business: Respiratory Care
Our Business: Respiratory Care
Slide 18: Respiratory care strategy
Respiratory care strategy Changing the lives of COPD patients by bringing new solutions for unmet patient needs INNOVATE AND EXPAND TRANSFORM COPD WIN IN THE CORE INTO ADJACENCIES HEALTHCARE DELIVERY • Reach more COPD patients through • Treat patients earlier in COPD disease • Build intelligent ther
Slide 19: What is chronic obstructive pulmonary disease (COPD)?
What is chronic obstructive pulmonary disease (COPD)? COPD is a serious lung disease that over time, makes it hard to breathe Causes include: • smoking, vaping, & second hand smoke • a history of childhood infections (could be a catalyst) • pollution • genetic inheritance, leading to its onset • occ
Slide 20: COPD is a large and growing market
COPD is a large and growing market More than 380 million people worldwide are estimated to have COPD –Largely undiagnosed COPD sufferers in high-growth markets such as China, India, Brazil and E. Europe may be well over 100 million Cost to healthcare systems from COPD is enormous: –Europe: ~€48 bill
Slide 21: There is a need for end-to-end solutions for COPD patients
There is a need for end-to-end solutions for COPD patients Global population of COPD patients: ~380 million1 Self-management (smoking cessation, diet, exercise) Inhaled Pharmaceuticals for COPD Oxygen Ventilation 20% <1% of pop. 75% of pop. of pop. Increasing severity of disease COPD Stage I Stage I
Slide 22: Our digital health platform supports COPD patients on their healthcare journey
Our digital health platform supports COPD patients on their healthcare journey The digital respiratory Integrated Care Model Data processed by a Driving value propositions we are creating through Propeller powerful insights engine for stakeholders Order telehealth consultation Spirometry Non-invasiv
Slide 23: We have the full spectrum of solutions for respiratory care
We have the full spectrum of solutions for respiratory care Patient Management Digital Therapeutics Portable Oxygen High-Flow Therapy AirView™ for Respiratory Propeller Mobi™ AcuCare™ high flow Bilevel Ventilation Non-invasive Ventilation (NIV) Life Support Ventilation AirCurve 10™ Lumis™ Stellar™ A
Slide 24: Our Business: Software as a Service (SaaS)
Our Business: Software as a Service (SaaS)
Slide 25: SaaS portfolio well positioned to improve outcomes and lower costs
SaaS portfolio well positioned to improve outcomes and lower costs across out-of-hospital healthcare Better patient experience. Improved clinical outcomes. Lower overall cost of care. • Single view of the patient • Comprehensive interoperability • Care transition, coordination, and collaboration • S
Slide 26: Leading provider of cloud-based software for out-of-hospital care providers
Leading provider of cloud-based software for out-of-hospital care providers across multiple settings Loved One/ Caregiver $ Payor Patients and Residents Hospital Physician MatrixCare Skilled Home Health Hospice Private Duty Senior Living Life Plan Nursing Community Brightree HME Providers ResMed Sl
Slide 27: SaaS portfolio is operating at scale and creating value
SaaS portfolio is operating at scale and creating value Portfolio is financially Supports growth for attractive on its own existing businesses and with leading (HME) and chronic positions in key diseases, sleep apnea segments. and COPD in particular. Breadth and scale creates our competitive advanta
Slide 28: Digital Health Technology
Digital Health Technology
Slide 29: Digital health technology is our foundation
Digital health technology is our foundation Purpose: Enable all ResMed businesses to achieve their business objectives by leveraging technology, data, and advanced analytics. Sleep Respiratory Care SaaS Digital Health Technology Technology + Advanced Analytics © 2020 ResMed | 2Q20 Investor Presentat
Slide 30: Our digital health solutions improve outcomes and lower costs
Our digital health solutions improve outcomes and lower costs ResMed Ecosystem Patient Outcomes Artificial Intelligence Connected Devices and Digital Health Out-of-Hospital Platform CLINICIAN Business Outcomes Machine Learning APPS/DIGITAL IDN THERAPEUTICS PATIENT/ Operations CONSUMER HME/PAYORS DEV
Slide 31: We transform 5.5+ billion nights of medical data into useful outcomes
We transform 5.5+ billion nights of medical data into useful outcomes End-to-end connected health solutions in sleep, respiratory care, and out-of-hospital healthcare 3rd Party Diagnostics DIAGNOSIS THERAPY MONITORING & MGMT. PATIENT ENGAGEMENT BILLING & INTEGRATIONS © 2020 ResMed | 2Q20 Investor Pr
Slide 32: Global leadership in digital health
Global leadership in digital health AirView™ has over ~11 million 12 million patients 100% cloud connectable devices worldwide 1 million+ diagnostic tests 90+ million accounts in processed in the cloud out-of-hospital care network ~100 API calls per 2 million+ patients have second from integrators s
Slide 33: Recent Financial Results
Recent Financial Results
Slide 34: Q2 FY20 financial results
Q2 FY20 financial results Diversified revenue by business & by geography OOH SaaS 12% 2Q20 $736.2M Revenue Devices +13% (+14% CC) 50% 59.7% Non-GAAP Gross margin Masks & Other +60 bps 38% $218.5M Non-GAAP operating income* +21% $1.21 Non-GAAP EPS* 21% Europe, Asia, and Other Free cash flow $44.8M 33
Slide 35: Track record of strong financial returns for shareholders
Track record of strong financial returns for shareholders Non-GAAP Revenue ($B) Operating Income ($M) Non-GAAP EPS 11% CAGR 14% CAGR 10% CAGR $2.8 $3.98 $788 $1.6 $2.51 $416 LTM 2Q15 LTM 2Q20 LTM 2Q15 LTM 2Q20 LTM 2Q15 LTM 2Q20 Total Shareholder Return (NYSE shares as of 12/31/19): 1-yr 38% ▪ 3-yr 1
Slide 36: Striving for excellence in environmental, social, and governance processes
Striving for excellence in environmental, social, and governance processes Recognized by others for leading in this space: • #18 on Forbes & Just Capital’s “2019 Just 100,” #1 in Healthcare Equipment and Services • #125 on WSJ’s 2019 Management Top 250 of the U.S.’s most well-run companies for custo
Slide 37: ResMed is the global leader in connected & digital health
ResMed is the global leader in connected & digital health Market Dynamics Growth & Innovation Financial Results • Underpenetrated markets in • Global leader in connected • Historical revenue and profit sleep and COPD health for sleep and growth • Healthcare costs continue to respiratory care • Recur
Slide 38: We changed over 100 million lives with our digital health products
In the last 12 months, we changed over 100 million lives with our digital health products and cloud-based software solutions Our aspiration is to improve 250 million lives in 2025
Slide 39: Contact Investor Relations
Contact Investor Relations Phone: (858) 836-5971 Email: investorrelations@resmed.com Website: investor.resmed.com
Slide 40: APPENDIX
APPENDIX
Slide 41: Turning big data into actionable information
Turning big data into actionable information Pioneering innovation and providing clinical evidence that support better patient outcomes and improved business efficiencies for customers Labor World’s largest study for adherence Costs2 59% 21 % > 128,000 patients patient adherence with automated compl
Slide 42: Improving adherence to therapy with patient monitoring and resupply
Improving adherence to therapy with patient monitoring and resupply ResAdhere: remote monitoring + mask resupply drive improved adherence In a study of ~100k patients with AirView cloud-connected devices… 100 100% Probability on Therapy (%) 84% 66% 0 Resupply group (AirView + Brightree) 90 360 Contr
Slide 43: Big data analysis drives insights for treatment of central sleep apnea
Big data analysis drives insights for treatment of central sleep apnea Patients with treatment-emergent central sleep apnea (CSA) are 2x more likely to terminate therapy • Opportunity to rethink conventional therapeutic options • Minimize risk of therapy termination through early diagnosis • Regular
Slide 44: Opportunity to shift care from hospital to home
Opportunity to shift care from hospital to home • Healthcare costs are on the rise • Combining non-invasive ventilation (NIV) with home oxygen therapy (HOT) − Reduces hospitalization and mortality by 51% − Increases time to hospital readmission or death by ~90 days Admission-free survival by treatme
Slide 45: Digital health solutions for inhaled COPD pharmaceuticals
Digital health solutions for inhaled COPD pharmaceuticals • ResMed now has end-to-end solutions for Digital Health for • Establishes ResMed as a leading provider of COPD and COPD patients across stages I, II, III, IV of the disease asthma patient management solutions • Uses sensors with inhalers to
Slide 46: Propeller has demonstrated compelling clinical outcomes
Propeller has demonstrated compelling clinical outcomes Impact of the Propeller solution tracking inhaler usage and location SABA use over time Symptom free days Healthcare utilization # per day % Events 79 -25% 2.0 75 +32% 59 1.5 -50% 50 1.0 0.5 25 Uncontrolled 0.0 0 COPD 0 50 100 150 200 0 50 100
Slide 47: Propeller's digital medicine platform drives reduced healthcare utilization
Propeller’s digital medicine platform drives reduced healthcare utilization Results: Study Overview: Cleveland Clinic enrolled people into Propeller as part of their routine clinical care and monitored them for at least one year. Providers monitored drug use and adherence to inhaled controller medic
Slide 48: History of successful SaaS acquisitions
History of successful SaaS acquisitions Company Location Date Key Product Status Halifax, NS Aug 2012 U-Sleep Integrated into AirView. Canada Knoxville, TN Feb 2015 GoJaysec Rebranded as GoScripts. Denver, CO Jul 2015 CareTouch 360 Rebranded as ResMed ReSupply. Lawrenceville, GA Feb 2016 Brightree C