Slide 1: Fourth Quarter 2018 Earnings Conference Call
Teleflex Incorporated Fourth Quarter 2018 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 3059948 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 and Non-GAAP Financial Measures
Note on Forward-Looking Statements This presentation and our discussion contain forward-looking information and statements including, but not limited to, our expected commercial efforts in 2019 related to our MANTA Vascular Closure Device; statements regarding our 2019 strategic initiatives; forecas
Slide 5: 4Q18 and FY18 Highlights
4Q18 and FY18 Highlights Revenue Highlights • As-reported revenue increased 7.8% versus 4Q17 • Constant currency revenue increased 9.4% versus 4Q17 • Achieved full year constant currency and organic constant currency revenue growth guidance ranges Strong Interventional Urology Performance • UroLift
Slide 6: 4Q18 Constant Currency Revenue Growth
4Q18 Constant Currency Revenue Growth Q4 2018 Constant Currency Revenue Growth Volume (excluding surgical product line exit and shipping day impact) 5.4% New Product Introductions 1.7% Shipping Day Impact 1.4% Price 0.8% M&A 0.3% Surgical Product Line Exit (0.2%) Constant Currency Revenue Growth 9.4
Slide 7: Segment Revenue Review
Segment Revenue Review Total Constant Dollars Q4’18 Q4’17 Currency Sales Currency in Millions Revenue Revenue Impact Growth Growth Vascular NA $85.7 $80.7 6.1% (0.2%) 6.3% Interventional NA $69.7 $61.7 13.2% (0.1%) 13.3% Anesthesia NA $50.8 $49.9 2.0% (0.1%) 2.1% Surgical NA $42.4 $43.7 (3.2%) (0.2%
Slide 8: Product and Clinical Updates: UroLift System
Product and Clinical Updates UroLift® System KEY TAKEAWAYS • Received Shonin approval in Japan for the UroLift® System in November 2018; currently investing in pre- launch activities ahead of reimbursement and expected limited launch in 2020 • 12-Month results from study of UroLift for BPH in men wi
Slide 9: Product and Clinical Updates: MANTA Vascular Closure Device
Product and Clinical Updates MANTA™ Vascular Closure Device Receives Premarket Approval (PMA) from U.S. FDA on February 1, 2019 The MANTA Vascular Closure Device KEY TAKEAWAYS • The MANTA™ Vascular Closure Device received Premarket Approval (PMA) from U.S. FDA on February 1, 2019 • First commerciall
Slide 10: 2019 Strategic Initiatives
2019 Strategic Initiatives Delivering 6% - 7% Constant Currency Revenue Growth and Robust Adjusted Earnings Growth While Investing in the Future • Execute go-deep commercial strategy Drive Penetration • Methodically expand sales force (reps and clinical associates) of UroLift • Leverage strong reimb
Slide 11: 2019 Reporting Changes
2019 Reporting Changes 2018 Reporting 2019 Reporting Segment Reporting Segment Reporting Vascular, N.A. Americas Interventional, N.A. EMEA Anesthesia, N.A. Asia Surgical, N.A. OEM EMEA All Other Asia OEM All Other1 Global Product Family Revenues Global Vascular Access Global Interventional Global An
Slide 12: 4Q18 Financial Review
4Q18 Financial Review Revenue of $641.6 million • Up 7.8% vs. prior year period on an as-reported basis • Up 9.4% vs. prior year period on a constant currency basis Gross Margin • GAAP gross margin of 57.0%, up 140 bps vs. prior year period • Adjusted gross margin of 57.6%, up 110 bps vs. prior year
Slide 13: 2019 Revenue Guidance
2019 Revenue Guidance 2019 revenue guidance assumes an acceleration in organic constant currency revenue growth driven by Interventional Urology, Interventional Access, and Asia 2019 Guidance 2018 Low High Actual 2019 GAAP Revenue Growth 5.0% 6.0% 14.1% Impact of Foreign Exchange Rate Fluctuations -
Slide 14: 2019 Adjusted Gross Margin Guidance
2019 Adjusted Gross Margin Guidance +90 bps to +140 bps +130 bps 2019 Adjusted Gross Margin Drivers Gross margin expansion in 2019 as compared +170 bps to 2018 expected to be driven by: • Higher margin Interventional Urology and 55% Interventional Access product mix 58.0% to • Manufacturing producti
Slide 15: 2019 Adjusted Operating Margin Guidance
2019 Adjusted Operating Margin Guidance +80 bps to +130 bps +60 bps +100 bps 2019 Adjusted Operating Margin Drivers 25% Adjusted gross margin drop through to adjusted operating margin line 26.5% Near-term operating leverage offset by: to 25.7% 25.1% 27.0% • Investments in MANTA, UroLift Japan and 24
Slide 16: 2019 Adjusted EPS Guidance
2019 Adjusted EPS Guidance 2019 adjusted EPS growth is expected to be between 10.1% and 12.1%, including a significant level of incremental growth investments over 2018 Low High 2018 Adjusted Earnings per Share $9.90 $9.90 Operations $1.66 $1.71 Interest Expense $0.25 $0.30 Taxes ($0.40) ($0.30) For
Slide 17: Question and Answer Section
Question and Answer Section 17
Slide 18: Thank You
THANK YOU 18 Veleflex:
Slide 19: Appendices
Appendices Veleflex:
Slide 20: 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 21: 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. Restru
Slide 22: Appendix A – Reconciliation of Constant Currency Revenue Growth
Appendix A – Reconciliation of Constant Currency Revenue Growth Dollars in Millions Three Months Ended % Increase / (Decrease) Total Currency Constant Currency December 31, 2018 December 31, 2017 Revenue Growth Impact Revenue Growth Vascular North America $ 85.7 $ 80.7 6.1% (0.2%) 6.3% Interventiona
Slide 23: Appendix B – Revenue Growth
Appendix B – Revenue Growth Dollars in Millions Three Months Ended Twelve Months Ended Year-Over-Year Year-Over-Year Growth % Growth % December 31, 2017 Revenue As-Reported $ 595.1 $ 2,146.3 Foreign currency $ (8.5) -1.6% $ 25.3 1.3% Volume (excluding Surgical product line exit and the impact of shi
Slide 24: Appendix C – Reconciliation of Adjusted Gross Profit and Margin
Appendix C – Reconciliation of Adjusted Gross Profit and Margin Dollars in Thousands Three Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 Teleflex gross profit as-reported $ 365,821 $ 330,731 $ 1,384,442 $ 1,171,802 Teleflex gross margin as-r
Slide 25: Appendix D – Reconciliation of Adjusted Operating Profit and Margin
Appendix D – Reconciliation of Adjusted Operating Profit and Margin Dollars in Thousands Three Months Ended Tw elve Months Ended Decem ber 31, 2018 Decem ber 31, 2017 Decem ber 31, 2018 Decem ber 31, 2017 Teleflex incom e from continuing operations before interest, loss on extinguishm ent of debt an
Slide 26: Appendix E – Reconciliation of 2016 Adjusted Gross and Operating Profit and Margin
Appendix E – Reconciliation of 2016 Adjusted Gross and Operating Profit and Margin Dollars in Thousands Twelve Months Ended Twelve Months Ended December 31, 2016 December 31, 2016 Income from continuing operations before interest, loss on Gross profit as-reported $ 996,200 extinguishment of debt and
Slide 27: Appendix F – Reconciliation of Adjusted Tax Rate
Appendix F – 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 operatio
Slide 28: Appendix G – Reconciliation of Adjusted EPS, Three Months Ended Dec 31, 2018
Appendix G – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended– December 31, 2018 Dollars in Millions, except per share data Selling, general Restructuring Net incom e (loss) Diluted earnings Shares used in Cost of Research and (Gain) loss on and and Incom e attributable t
Slide 29: Appendix H – Reconciliation of Adjusted EPS, Three Months Ended Dec 31, 2017
Appendix H – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended – December 31, 2017 Dollars in Millions, except per share data Selling, general Restructuring Net incom e (loss) Diluted earnings Shares used in Cost of Research and and and Incom e attributable to com m on per
Slide 30: Appendix I – Reconciliation of Adjusted EPS, Twelve Months Ended Dec 31, 2018
Appendix I – Reconciliation of Adjusted EPS from Continuing Operations Twelve Months Ended –December 31, 2018 Dollars in Millions, except per share data Selling, general Restructuring Net incom e (loss) Diluted earnings Shares used in Cost of Research and (Gain) loss on and and Incom e attributable
Slide 31: Appendix J – Reconciliation of Adjusted EPS, Twelve Months Ended Dec 31, 2017
Appendix J – Reconciliation of Adjusted EPS from Continuing Operations Twelve Months Ended – December 31, 2017 Dollars in Millions, except per share data Selling, general Restructuring Net incom e (loss) Diluted earnings Shares used in Cost of Research and Loss on and and Interest Incom e attributab
Slide 32: Appendices G, H, I and J – tickmarks
Appendices G, H, I and J – tickmarks (A) Restructuring, restructuring related and impairment items - For the three months ended December 31, 2018 and December 31, 2017, pre- tax restructuring related charges were $4.4 million and $4.4 million, respectively. For the twelve months ended December 31, 2
Slide 33: Appendix K – Reconciliation of 2019 Adjusted Gross and Operating Margin Guidance
Appendix K – Reconciliation of 2019 Adjusted Gross and Operating Margin Guidance 2019 Guidance Low High Forecasted GAAP Gross Margin 57.20% 57.75% Estimated restructuring, restructuring related and impairment items 0.80% 0.75% Estimated acquisition, integration and divestiture related items 0.00% 0.
Slide 34: Appendix L – Reconciliation of 2019 Adjusted Earnings Per Share Guidance
Appendix L – Reconciliation of 2019 Adjusted Earnings Per Share Guidance 2019 Guidance Low High Forecasted GAAP Diluted Earnings Per Share $6.90 $7.05 Estimated Restructuring, restructuring related and impairment items, net of tax $0.68 $0.70 Estimated acquisition, integration and divestiture relate
Slide 35: Appendix M – 2019 Financial Outlook Assumptions
Appendix M – 2019 Financial Outlook Assumptions Euro to U.S. Dollar exchange rate assumed to be approximately 1.15 for full year 2019 Adjusted weighted average shares expected to be approximately 47.2 million for full year 2019 2019 Calendar of shipping days: Q1’19 vs. Q1’18: no difference Q2’19 vs.
Slide 36: Appendix N – Teleflex Restructuring and Similar Cost Savings Initiatives Summary
Appendix N – Teleflex Restructuring and Similar Cost Savings Initiatives Summary In February 2019, we initiated a restructuring plan involving the relocation of certain manufacturing operations to existing lower-cost locations and related workforce reductions (the “2019 Footprint realignment plan").
Slide 37: Appendix O – 4Q18 and YTD GPO and IDN Review
Appendix O – 4Q18 and YTD GPO and IDN Review Group Purchasing Organization Update QTD YTD Renewed agreements 3 21 New agreements 0 4 Existing agreements lost 4 4 IDN Update QTD YTD Renewed agreements 9 25 New agreements 6 20 Existing agreements lost 5 7 37