Slide 1: Teleflex Incorporated Fourth Quarter 2019 Earnings Conference Call
Teleflex Incorporated Fourth Quarter 2019 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 available by dialing (855) 859-2056 or for international calls, (404) 537-3406, pass code number 5857007 2
Slide 3: Today's Speakers
Today’s Speakers Liam Kelly President and CEO Thomas Powell Executive Vice President and CFO Jake Elguicze Treasurer and Vice President, Investor Relations 3
Slide 4: Note on Forward-Looking Statements
Note on Forward-Looking Statements This presentation contains forward-looking statements, including, but not limited to, our expectation with respect to the impact of our acquisition of IWG High Performance Conductors, Inc. on our average revenue growth and operating margin profile; forecasted 2020
Slide 5: 4Q19 and FY19 Highlights
4Q19 and FY19 Highlights Revenue Highlights • 4Q19 as-reported revenue increased 6.1% versus 4Q18 • 4Q19 constant currency revenue increased 7.1% versus 4Q18 • FY19 as-reported revenue increased 6.0% versus FY18 • FY19 constant currency revenue increased 8.1% versus FY18 Broad Based Product Category
Slide 6: 4Q19 Segment Revenue Review
4Q19 Segment Revenue Review As-Reported Constant Dollars Q4’19 Q4’18 Currency Revenue Currency in Millions Revenue Revenue Impact Growth Growth Americas $400.0 $358.2 11.6% (0.1%) 11.7% EMEA $145.9 $150.9 (3.3%) (2.7%) (0.6%) Asia $80.5 $79.8 1.0% (1.7%) 2.7% OEM $54.6 $52.7 3.6% (0.7%) 4.3% TOTAL $
Slide 7: 4Q19 Global Product Category Revenue Review
4Q19 Global Product Category Revenue Review As-Reported Constant Dollars Q4’19 Q4’18 Currency Revenue Currency in Millions Revenue Revenue Impact Growth Growth Vascular Access $154.6 $149.1 3.7% (0.9%) 4.6% Interventional $112.7 $107.1 5.2% (0.8%) 6.0% Anesthesia $85.3 $87.6 (2.6%) (1.3%) (1.3%) Sur
Slide 8: Product and Clinical Updates
Product and Clinical Updates UroLift® System KEY TAKEAWAYS • U.S. Food and Drug Administration (FDA) has granted the company an expanded indication for the use of its UroLift® System to treat larger prostates, between 80cc and100cc. • The collection of data presented to the FDA demonstrates that the
Slide 9: Acquisition Update
Acquisition Update Acquires IWG High Performance Conductors, Inc. KEY TAKEAWAYS • Market Leader in Insulated Ultra Fine Wires and Polyimide and Polymer Micro-Diameter Tubing Components • Provides two highly complementary, differentiated capability platforms, including: ➢ Ultra-fine wire and polyimid
Slide 10: 4Q19 Financial Review
4Q19 Financial Review Revenue of $681.0 million • Up 6.1% vs. prior year period on an as-reported basis • Up 7.1% vs. prior year period on a constant currency basis Gross Margin • GAAP gross margin of 58.5%, up 150 bps vs. prior year period • Adjusted gross margin of 59.2%, up 160 bps vs. prior year
Slide 11: 2020 Revenue Guidance
2020 Revenue Guidance 2020 constant currency revenue growth expected to be driven by Interventional Urology, Vascular Access, Interventional Access, and OEM 2020 Guidance 2019 Low High Actual GAAP Revenue Growth 6.5% 7.5% 6.0% Impact of Foreign Exchange Rate Fluctuations -0.7% -0.7% -2.1% Constant C
Slide 12: 2020 Adjusted Gross Margin Guidance
2020 Adjusted Gross Margin Guidance 60% +65 bps to +115 bps 58.75% 2020 Adj. Gross Margin Drivers +100 bps to Gross margin expansion in 2020 as 59.25% compared to 2019 expected to be driven by: 58% +130 bps 58.1% • Higher margin Interventional Urology, Interventional Access, and Vascular Access 57.1
Slide 13: 2020 Adjusted Operating Margin Guidance
2020 Adjusted Operating Margin Guidance +145 bps to +195 bps 28% 2020 Adj. Operating Margin Drivers 27.25% to Operating margin expansion in 2020 as 27.75% compared to 2019 expected to be driven by: +60 bps +10 bps • Gross margin expansion 25.8% 25% • Operating expense leverage 25.7% ➢ UroLift ➢ Base
Slide 14: 2020 Adjusted EPS Guidance
2020 Adjusted EPS Guidance 2020 adjusted EPS growth is expected to be between 12.1% and 13.9%, or approximately double the level of as-reported revenue growth 2020 Guidance Low High 2019 Adjusted Earnings per Share $11.15 $11.15 Operations $1.99 $1.92 Interest Expense $0.09 $0.16 Taxes ($0.42) ($0.2
Slide 15: Question and Answer Section
Question and Answer Section 15
Slide 16: Thank You
THANK YOU 16 Veleflex:
Slide 17: Appendices
Appendices Veleflex:
Slide 18: 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 19: 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 20: Appendix A – Reconciliation of Adjusted Gross Profit and Margin
Appendix A – Reconciliation of Adjusted Gross Profit and Margin (Dollars in Thousands) Three Months Ended Twelve Months Ended December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Teleflex gross profit as-reported $ 398,266 $ 365,821 $ 1,491,612 $ 1,384,442 Teleflex gross margin as
Slide 21: Appendix B – Reconciliation of Adjusted Operating Profit and Margin
Appendix B – Reconciliation of Adjusted Operating Profit and Margin (Dollars in Thousands) Three Months Ended Tw elve Months Ended Decem ber 31, 2019 Decem ber 31, 2018 Decem ber 31, 2019 Decem ber 31, 2018 Teleflex incom e from continuing operations before interest and taxes $ 126,932 $ 119,266 $ 4
Slide 22: Appendix C – Reconciliation of Adjusted Tax Rate
Appendix C – Reconciliation of Adjusted Tax Rate (Dollars in Thousands) Three Months Ended Tw elve Months Ended Incom e from Taxes on Incom e from Taxes on continuing incom e from continuing incom e from operations continuing operations continuing before taxes operations Tax rate before taxes operat
Slide 23: Appendix D – Reconciliation of Adjusted EPS from Continuing Operations
Appendix D – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended– December 31, 2019 (Dollars in Millions, except per share data) Selling, general Restructuring Diluted earnings Cost of goods sold, Research and (Gain) loss on Loss on and and Incom e Incom e (loss) from per sh
Slide 24: Appendix E – Reconciliation of Adjusted EPS from Continuing Operations
Appendix E – Reconciliation of Adjusted EPS from Continuing Operations Twelve Months Ended–December 31, 2019 (Dollars in Millions, except per share data) Selling, general Restructuring Diluted earnings Cost of goods sold, Research and (Gain) loss on Loss on and and Incom e Incom e (loss) from per sh
Slide 25: Appendix F – Reconciliation of Adjusted EPS from Continuing Operations
Appendix F – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended –December 31, 2018 (Dollars in Millions, except per share data) Selling, general Restructuring Diluted earnings Cost of goods sold, Research and (Gain) loss on and and Incom e Incom e (loss) from per share from
Slide 26: Appendix G – Reconciliation of Adjusted EPS from Continuing Operations
Appendix G – Reconciliation of Adjusted EPS from Continuing Operations Twelve Months Ended –December 31, 2018 (Dollars in Millions, except per share data) Selling, general Restructuring Diluted earnings Cost of goods sold, Research and (Gain) loss on and and Incom e Incom e (loss) from per share fro
Slide 27: Appendices D, E, F and G – tickmarks
Appendices D, E, F and G – tickmarks (A) Restructuring, restructuring related and impairment items – For the three months ended December 31, 2019 pre-tax restructuring charges were $1.8 million, pre-tax restructuring related charges were $5.3 million, and pre-tax impairment charges were $0.1 million
Slide 28: Appendix H – Reconciliation of 2017 Adjusted Gross and Operating Profit
Appendix H – Reconciliation of 2017 Adjusted Gross and Operating Profit and Margin (Dollars in Thousands) Twelve Months Ended Twelve Months Ended December 31, 2017 December 31, 2017 Teleflex gross profit as-reported $ 1,171,802 Teleflex incom e from continuing operations before interest and taxes $
Slide 29: Appendix I – Reconciliation of 2020 Adjusted Gross and Operating Margin Guidance
Appendix I – Reconciliation of 2020 Adjusted Gross and Operating Margin Guidance 2020 Guidance Low High Forecasted GAAP Gross Margin 57.65% 58.25% Estimated restructuring, restructuring related and impairment items 1.05% 1.00% Estimated acquisition, integration and divestiture related items 0.05% -
Slide 30: Appendix J – Reconciliation of 2020 Adjusted Earnings Per Share Guidance
Appendix J – Reconciliation of 2020 Adjusted Earnings Per Share Guidance 2020 Guidance Low High Forecasted GAAP Diluted Earnings Per Share from continuing operations $7.70 $7.85 Estimated Restructuring, restructuring related and impairment items, net of tax $0.65 $0.67 Estimated acquisition, integra
Slide 31: Appendix K – 2020 Financial Outlook Assumptions
Appendix K – 2020 Financial Outlook Assumptions Euro to U.S. Dollar exchange rate assumed to be approximately 1.11 for full year 2020 Adjusted weighted average shares expected to be approximately 47.5 million for full year 2020 2020 Calendar of shipping days: Q1’20 vs. Q1’19: 1 less day Q2’20 vs. Q2
Slide 32: Appendix L – Teleflex Restructuring and Similar Cost Savings Initiatives Summary
Appendix L – Teleflex Restructuring and Similar Cost Savings Initiatives Summary In February 2019, we initiated a restructuring plan primarily involving the relocation of certain manufacturing operations to existing lower-cost locations and related workforce reductions (the “2019 Footprint realignme
Slide 33: Appendix M – 4Q 2019 and Full Year 2019 GPO and IDN Review
Appendix M – 4Q 2019 and Full Year 2019 GPO and IDN Review Group Purchasing Organization Update 4Q19 FY19 Renewed agreements 4 21 New agreements 1 3 Existing agreements lost 0 1 IDN Update 4Q19 FY19 Renewed agreements 12 37 New agreements 14 28 Existing agreements lost 1 2 33
Slide 34: Appendix N – FY19 Segment Revenue Review
Appendix N – FY19 Segment Revenue Review As-Reported Constant Dollars FY’19 FY’18 Currency Revenue Currency in Millions Revenue Revenue Impact Growth Growth Americas $1,492.3 $1,351.7 10.4% (0.2%) 10.6% EMEA $588.1 $603.8 (2.6%) (5.3%) 2.7% Asia $294.3 $286.9 2.6% (4.2%) 6.8% OEM $220.7 $206.0 7.2%
Slide 35: Appendix O – FY19 Global Product Category Revenue Review
Appendix O – FY19 Global Product Category Revenue Review As-Reported Constant Dollars FY’19 FY’18 Currency Revenue Currency in Millions Revenue Revenue Impact Growth Growth Vascular Access $600.9 $575.3 4.4% (1.9%) 6.3% Interventional $427.6 $395.4 8.1% (1.7%) 9.8% Anesthesia $338.4 $349.4 (3.1%) (2
Slide 36: Appendix P – FY19 Financial Review
Appendix P – FY19 Financial Review Revenue of $2,595.4 million • Up 6.0% vs. prior year on an as-reported basis • Up 8.1% vs. prior year on a constant currency basis Gross Margin • GAAP gross margin of 57.5%, up 100 bps vs. prior year • Adjusted gross margin of 58.1%, up 100 bps vs. prior year Opera