Livanova Plc · NASDAQ:LIVN
Livanova — Q3 2023 Earnings Presentation
27 slides from Livanova's earnings presentation, Nov 1, 2023
Slide 1: Third Quarter 2023 Earnings Update
LivaNova Health innovation that matters Essenz™ Perfusion System Third Quarter 2023 Earnings Update November 1, 2023
Slide 2: Safe Harbor
Safe Harbor Certain statements in this material, other than statements of historical or current fact, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements i
Slide 3: Intellectual Property, Trademarks and Trade Names
Intellectual Property, Trademarks and Trade Names This report may contain references to our proprietary intellectual property, including among others: • Trademarks for our Neuromodulation systems, the VNS Therapy™ System, the VITARIA™ System and our proprietary pulse generator products: Model 102 (P
Slide 4: Contents
Contents 3Q23 Financial Results 2023 Guidance and Assumptions Closing Thoughts Appendix 4
Slide 5: Financial Results
Financial Results Financial Results 5
Slide 6: 3Q23 Financial Summary
3Q23 Financial Summary 3Q22 3Q23 Net Revenue ($M) Adjusted Diluted EPS et Sales ($ in MM) Adjusted Diluted EPS $286.1 $252.6 • Net revenue increased 12.1 percent on a constant-currency basis $0.73 $0.58 • Foreign currency had a favorable impact on net revenue of ~$3M, or 1 percent Adjusted Gross Pro
Slide 7: 3Q23 Net Revenue
3Q23 Net Revenue Cardiopulmonary (CP) Neuromodulation • Heart-lung machines (HLM) • Oxygenators Vagus Nerve Stimulation Therapy • Autotransfusion systems (ATS) (VNS Therapy) • Cannulae • Drug-Resistant Epilepsy (DRE) • Difficult-to-Treat Depression (DTD) 45% $286.1M 12.1% increase(1) 51% Hypoglossal
Slide 8: Segment Net Revenue Comparisons by Region
Segment Net Revenue Comparisons by Region Three Months Ended September 30, Constant- Currency % ($M) 2023 2022 % Change Change(1) Cardiopulmonary United States $48.5 $38.5 26.2% 26.2% Europe(2) 35.2 28.8 22.4% 13.2% Rest of World 61.1 53.7 13.7% 14.9% Total 144.8 121.0 19.7% 18.1% Neuromodulation Un
Slide 9: 3Q23 Cardiopulmonary Revenue
3Q23 Cardiopulmonary Revenue(1) Drivers/Impacts Net Revenue ($M) 18.1% $144.8 Revenue increased 18% with double-digit growth across all regions. $121.0 $61.1 $53.7 Oxygenator revenue grew in the mid-teens driven by strong demand. $35.2 $28.8 HLM revenue grew more than 25% driven by Essenz $48.5 inst
Slide 10: 3Q23 Neuromodulation Revenue
3Q23 Neuromodulation Revenue(1) Drivers/Impacts Net Revenue ($M) 5.2% $128.9 $121.8 $13.7 Revenue increased 5% with growth in the U.S. and Europe. $14.2 $12.7 $11.1 Total Epilepsy revenue grew 6% with U.S. Epilepsy revenue growth of 7% driven by price and product mix. $96.5 $102.5 Europe Epilepsy re
Slide 11: 3Q23 Advanced Circulatory Support Revenue
3Q23 Advanced Circulatory Support Revenue(1) Drivers/Impacts Net Revenue ($M) 26.6% ACS revenue increased 27% reflecting growth in overall case $11.0 volumes. $8.6 Kits used for cardiac and respiratory procedures grew year over year, partially offset by product mix. 3Q22 3Q23 Numbers may not add pre
Slide 12: 3Q23 Adjusted Segment Operating Income and Margin
3Q23 Adjusted Segment Operating Income and Margin(1) % to Revenue $66.0M 3Q22 3Q23 $49.2M Cardiopulmonary 11.7% 14.2% $48.3 Neuromodulation 34.4% 37.4% $41.9 ACS (79.1)% (26.2)% Total Segment Margin 19.6% 23.2% $20.6 Total Operating Margin(2) 14.5% 15.7% $14.1 $(6.8) $(2.9) Cardiopulmonary Neuromodu
Slide 13: Adjusted Free Cash Flow
Adjusted Free Cash Flow Targeting $85 - 95M of adjusted free cash flow (FCF) for full-year 2023 Adjusted Free Cash Flow Reconciliation ($M) 1Q 2023 2Q 2023 3Q 2023 2023 YTD Net cash provided by (used in) operating activities $20.8 $(17.9) $18.1 $21.0 Less: Purchases of plant, property and equipment
Slide 14: 3Q 2023 Summary
3Q 2023 Summary • 12.1%(1) revenue growth, with double-digit growth across all regions • Adjusted operating margin favorably impacted by higher volume and realized price, partially offset by commercial and SPI Financial investments • Adjusted free cash flow impacted by higher working capital and cap
Slide 15: 2023 Guidance
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Slide 16: 2023 Guidance
2023 Guidance Raising full-year guidance for revenue, adjusted diluted EPS and narrowing range for adjusted FCF Consolidated Guidance Consolidated Guidance Consolidated Guidance Consolidated Guidance As of February 22, 2023 As of May 3, 2023 As of July 26, 2023 As of November 1, 2023 Net revenue gro
Slide 17: Assumptions for 2023
Assumptions for 2023 • Cardiopulmonary revenue now expected to grow 12-14% REVENUE(1) 9 - 11% • Epilepsy revenue now expected to grow 7-9% • ACS revenue expected to be flat year over year • Gross margin flat due to ongoing inflationary pressures, offset by productivity and price EPS(2) $2.60 - 2.80
Slide 18: 2023 Strategic Priorities
2023 Strategic Priorities Core Growth Focus on commercial execution in under-penetrated markets • Drive therapy expansion and VNS adoption for U.S. Epilepsy • Deliver on Essenz launch objectives • Continue growth in the Rest of World and Europe regions Pipeline Execution Strategic portfolio initiati
Slide 19: Appendix
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Slide 20: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations The following tables reconcile the most comparable U.S. Generally Accepted Accounting Principles (GAAP) measures to the non-GAAP financial and operating measures presented in LivaNova’s third-quarter 2023 press release and during the conference call held in conjuncti
Slide 21: 3Q23 Adjusted EPS
3Q23 Adjusted EPS(1) $0.16 $0.73 $0.21 $0.02 $0.44 $0.11 $(0.04) $(0.05) $(0.14) GAAP Financial Depreciation and Financing Contingent Certain Legal and Stock-based Certain Tax Certain Interest Adjusted Financial Measures Amortization Transactions Consideration Regulatory Costs Compensation Costs Adj
Slide 22: GAAP to Non-GAAP Reconciliations - Unaudited
GAAP to Non-GAAP Reconciliations - Unaudited RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED (U.S. dollars in millions, except per share amounts) Specified Items Depreciation and Stock-based Restructuring Amortization Financing Contingent Certain Legal & Compensation Certain Tax Ce
Slide 23: GAAP to Non-GAAP Reconciliations - Unaudited
GAAP to Non-GAAP Reconciliations - Unaudited RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED (U.S. dollars in millions, except per share amounts) Specified Items Merger and Depreciation and Stock-based Integration Restructuring Amortization Financing Contingent Certain Legal & Comp
Slide 24: GAAP to Non-GAAP Reconciliations - Unaudited
GAAP to Non-GAAP Reconciliations - Unaudited RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED (U.S. dollars in millions, except per share amounts) Specified Items Merger and Depreciation and Stock-based Integration Restructuring Amortization Financing Contingent Certain Legal & Comp
Slide 25: GAAP to Non-GAAP Reconciliations - Unaudited
GAAP to Non-GAAP Reconciliations - Unaudited (U.S. dollars in millions, except per share amounts) Specified Items Depreciation and Stock-based Merger and Restructuring Amortization Financing Contingent Certain Legal & Compensation Certain Tax Certain Interest Adjusted Nine Months Ended GAAP Financia
Slide 26: GAAP to Non-GAAP Reconciliations - Unaudited
GAAP to Non-GAAP Reconciliations - Unaudited RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED (U.S. dollars in millions) (U.S. dollars in millions) Three Months Ended Twelve Months Ended Adjusted free cash flow reconc
Slide 27: Segment Non-GAAP Reconciliation - Unaudited
Segment Non-GAAP Reconciliation - Unaudited (U.S. dollars in millions) Specified Items Stock-based Depreciation and Contingent Certain Legal & Compensation Three Months Ended GAAP Amortization Consideration Regulatory Costs Costs Adjusted September 30, 2023 Financial Results (A) (B) (C) (D) Financia