Slide 1: Investor Presentation Q3 2018
Investor Presentation Q3 2018 May 21, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation that are not historical facts are “forward- looking” statements as contemplated by the Private Securities Litigation Reform Act of 1995. These forward-looking statements — including statements regarding ResMed's projections of future re
Slide 3: Why invest in ResMed? - Driving long-term shareholder value
Why invest in ResMed? - Driving long-term shareholder value Market Dynamics Growth & Innovation Financial Results • Underpenetrated • Global leader in • Historical revenue and markets in sleep & connected health for profit growth COPD sleep and respiratory care • Recurring revenue • Healthcare costs
Slide 4: Market Dynamics
Market Dynamics © 2018 ResMed I 4
Slide 5: Global OSA Prevalence
Global OSA Prevalence AHI ≥ 5 AHI ≥ 15 936,360,689 424,630,028 Benjafield, et al. ATS Abstract 2018 © 2018 ResMed I 5
Slide 6: COPD is a large and growing market
COPD is a large and growing market • Chronic obstructive pulmonary disease (COPD) is the third leading cause of death worldwide1 • More than 380 million people worldwide are estimated to have COPD2 ‒ Largely undiagnosed COPD sufferers in high-growth markets such as China, India, Brazil and E. Europe
Slide 7: Healthcare Costs per Capita (USD)
Opportunity to shift care from hospital to home $12,000 9,892 $10,000 Healthcare Costs per Capita (USD) 7,919 $8,000 $6,000 5,488 5,551 4,519 4,708 4,708 4,753 4,192 3,946 $4,000 3,391 $2,000 $0 Source: Organization for Economic Cooperation and Development, OECD (2017), Health spending (indicator).
Slide 8: Non-invasive Ventilation and Oxygen: Better outcomes
Non-invasive Ventilation and Oxygen: Better outcomes Admission-free survival by treatment arm over one year 100 Combining non-invasive ventilation (NIV) with home 80 Adjusted hazard ratio, 0.49 (0.31-0.77); P=.002 Admission-free Survival % oxygen therapy (HOT): • Reduced hospitalization 60 Home Oxyg
Slide 9: HOT-HMV - Non Invasive Ventilation saves money
HOT-HMV - Non Invasive Ventilation saves money This study evaluated the economic impact of combining home non-invasive ventilation (HOT-HMV) with home oxygen therapy in the U.S. • The combination reduced readmission by 58.3% • The combination improved quality of life years while saving $50,856 in in
Slide 10: NIV: Potential to improve outcomes in COPD
NIV: Potential to improve outcomes in COPD 0.40 Control Group • Mortality risk reduced by over 60%* using Intervention Group long-term non-invasive ventilation (NIV) p=0.0004 treatment in severe, hypercapnic chronic 0.30 Cumulative Mortality obstructive pulmonary disease (COPD) • One-year mortality
Slide 11: Growth & Innovation
Growth & Innovation © 2018 ResMed I 11
Slide 12: ResMed's growth strategy
ResMed’s growth strategy Changing lives with every breath Number of Patient Lives Impacted Horizon 3 Invest in Portfolio of 20 million lives changed in 2020 New Market Options • Sleep & Consumer Wellness Improve patient quality of life ‒ Engagement in Sleep Health Slow chronic disease progression Ho
Slide 13: We have over 2 billion nights of data in the cloud
We have over 2 billion nights of data in the cloud Connected Health solutions from end-to-end in sleep and respiratory care 3rd Party Diagnostics DIAGNOSIS THERAPY MONITORING & MGMT. PATIENT ENGAGEMENT BILLING & INTEGRATIONS © 2018 ResMed I 13
Slide 14: Global leadership in Connected Health
Global leadership in Connected Health AirView™ has over 5 million+ patients 7 million+ patients monitored at home with connected care 200,000+ diagnostic tests Brightree has 50 million+ processed in the cloud patient accounts as part of its post-acute care network 30 API calls per second 1,500 patie
Slide 15: Connected Health - Better outcomes, improved efficiencies
Connected Health - Better outcomes, improved efficiencies Labor 59% World’s largest study for adherence 21 % patient adherence Costs2 > 128,000 patients 24 % with automated compliance New 55% coaching1 Patient Setups3 patient adherence with patient 1. 2. Hwang, et al., AJRCCM 2017 Munafo, et al. Sle
Slide 16: ResAdhere: Impact of Mask Resupply on Adherence
ResAdhere: Impact of Mask Resupply on Adherence 100,370 patients with AirView-connected devices World’s largest study for adherence All patients: Propensity Matched > 12,000 on: patients Age Gender CMS- PAP device defined for at least 1 Therapy Mode Device Type adherent year Start Date myAir Usage A
Slide 17: Mask Resupply improves treatment adherence
Mask Resupply improves treatment adherence World’s largest study for adherence > 12,000 patients Resupply Control Mean Usage (hrs) 5.6 4.5 Patients w Mean Usage ≥ 4hrs 77.0% 59.2% © 2018 ResMed I 17
Slide 18: Big data insights on central sleep apnea
Big data insights on central sleep apnea CSA ~two times chance of quitting therapy CPAP to ASV increased adherence • Big Data Study ~135,000 patients showed • Largest-ever analysis: ~200k those with treatment-emergent central patients sleep apnea (CSA) are two times more • Switching from CPAP to ASV
Slide 19: AirMini - the world's smallest and best travel-CPAP
AirMini™ - the world’s smallest and best travel-CPAP © 2017 2018 ResMed I 19 © 2018 ResMed I 19
Slide 20: Global leadership in sleep apnea management
Global leadership in sleep apnea management AirSense™10 AirViewTM myAir™ © 2018 ResMed I 20
Slide 21: Mobi - our newest portable oxygen concentrator
Mobi™ – our newest portable oxygen concentrator © 2018 ResMed I 21 © 2018 ResMed I 21
Slide 22: Full spectrum of solutions for respiratory care
Full spectrum of solutions for respiratory care High-Flow Therapy Portable Oxygen Concentrator AcuCare™ high flow Mobi™ Bilevel Ventilation Non-invasive Ventilation (NIV) Life Support Ventilation AirCurve 10 Lumis™ Stellar™ Astral™ Astral™ with RCM Patient Acuity © 2018 ResMed I 22
Slide 23: Longer term growth through a portfolio of options
Longer term growth through a portfolio of options • Adjacent Market Development − A-Fib, HFpEF, Asthma, Monitoring Stroke 62% • Sleep & Consumer wellness Atrial Fibrillation 49% ‒ Engagement in Sleep Health ‒ Expansion of ResMed brand Heart Failure 76% Type 2 Diabetes 72% Drug-Resistant Hypertension
Slide 24: Financial Results
Financial Results © 2018 ResMed I 24
Slide 25: Q3 2018 results
Q3 2018 results Key Financial Metrics Q3 2018 $591.6M Revenue +15% (+10% CC) Gross margin 58.2% $159.0M Non-GAAP operating profit* +25% $132.5M Non-GAAP net income* +32% $0.92 Non-GAAP EPS* +30% Cash flow from operations $149.1M Free cash flow $136.1M * ResMed adjusts for the impact of the amortizat
Slide 26: Diversified revenue sources by region & product
Diversified revenue sources by region & product Brightree Europe*, 7% Asia and Other 40% Masks and Accessories Devices 38% 55% US, Canada and Latin America 60% * Europe only = 29% Note: Represents Q3 2018 revenue breakdown © 2018 ResMed I 26
Slide 27: Disciplined financial track record
Disciplined financial track record Revenue ($B) Adjusted EPS Quarterly dividend per share 9% 10% 14% $2.82 CAGR CAGR CAGR $0.33 $2.1 $1.78 $0.17 $1.4 2012 2017 2012 2017 2012 2017 Fiscal Years ended June 30 © 2018 ResMed I 27
Slide 28: Operating Excellence: a continuous process at ResMed
Operating Excellence: a continuous process at ResMed Invest in innovation & unlock acquisition ResMed’s value Operating Excellence Process Efficiencies in product supply & Grow manufacturing operating Expand margins Operating Leverage © 2018 ResMed I 28
Slide 29: Proven capital management
Proven capital management Capital Deployment Free Cash Flow returned Increasing Dividend Investment for Growth to Shareholders FY 2017 dividend payout ratio New Products Last twelve months combined of 54% of net income dividend and stock repurchase Geographic expansion = 50% of free cash flo
Slide 30: Changing Lives with Every Breath
Changing Lives with Every Breath In the last 12 months, we changed more than 13 million lives. Our aspiration is to change 20 million lives by 2020 © 2017 2018 ResMed I 30
Slide 31: Why invest in ResMed? - Driving long-term shareholder value
Why invest in ResMed? - Driving long-term shareholder value Market Dynamics Growth & Innovation Financial Results • Underpenetrated • Global leader in • Historical revenue and markets in sleep & connected health for profit growth COPD sleep and respiratory care • Recurring revenue • Healthcare costs
Slide 32: Contact Investor Relations
Contact Investor Relations Phone: (858) 836-5971 Email: investorrelations@resmed.com Website: www.investors.resmed.com © 2018 ResMed I 32