Resmed Inc. · NYSE:RMD
Resmed — Q4 2015 Earnings Presentation
35 slides from Resmed's earnings presentation, Jul 30, 2015
Slide 1: Investor Presentation Q4 2015
Investor Presentation Q4 2015 July 30, 2015
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 reven
Slide 3: Who We Are
WHO WE ARE WHY INVEST WHERE WE’RE GOING © 2015 ResMed I 3
Slide 4: Overview
Overview Leading global developer, manufacturer and marketer of medical solutions to treat and manage sleep-disordered breathing, chronic obstructive pulmonary disease and other chronic respiratory conditions. • Operate in more than 100 countries directly and with distribution partners • Integrated
Slide 5: Holy Grail: Improve outcomes & reduce healthcare costs
Holy Grail: Improve outcomes & reduce healthcare costs • Improve quality of life for patients • Prevent chronic disease progression • Reduce costs of managing chronic disease © 2015 ResMed I 5
Slide 6: Opportunity to shift care from hospital to home
Opportunity to shift care from hospital to home Source: OECD report (2011) – WHY IS HEALTH SPENDING IN THE UNITED STATES SO HIGH? www.oecd.org © 2015 ResMed I 6
Slide 7: We can reduce costs of key chronic diseases
We can reduce costs of key chronic diseases $403 Annual costs per chronic condition billion $165 billion* $147 $145 billion billion Obstructive Sleep Apnea CVD & Stroke $20 billion Obesity Diabetes Asthma MMWR, Vol 60, 2011 CDC National Asthma CDC, National Diabetes Eric A. Finkelstein, et al, Healt
Slide 8: Why Invest
WHO WE ARE WHY INVEST WHERE WE’RE GOING © 2015 ResMed I 8
Slide 9: Why invest
Why invest Strong Portfolio Strong Performance Growth Drivers Broad range of Solid revenue growth Underpenetrated products & solutions track record global SDB market − Wireless, cloud- New adjacent markets Operational excellence connected devices in COPD, CAD & AF is part of our DNA − End-
Slide 10: Q4 2015 Results
Q4 2015 Results Key Financial Metrics Q4 2015 $453M Revenue +9% (17% CC) Non-GAAP gross margin* 58.4% $96M Non-GAAP net income* +3% $0.68 Non-GAAP EPS +3% $0.61 GAAP EPS Flat Operating profit $100M Cash flow from operations $100M Free cash flow $87M * Excludes $5 million in expenses associated with
Slide 11: FY 2015 Results
FY 2015 Results Key Financial Metrics Fiscal Year 2015 $1.7B Revenue +8% (13% CC) Non-GAAP gross margin* 60.5% $367M Non-GAAP net income* +3% $2.57 Non-GAAP EPS +4% $2.47 GAAP EPS +3% Operating profit $409M Cash flow from operations $383M Free cash flow $321M * Excludes $5 million in expenses associ
Slide 12: Diversified revenue sources by region & product
Diversified revenue sources by region & product Europe 30% Masks and Accessories 40% Americas Flow 60% Generators 60% Asia-Pacific 10% Note: Represents Q4 2015 revenue breakdown © 2015 ResMed I 12
Slide 13: Strong financial performance
Strong financial performance Revenue ($B) Adjusted Net Income ($M) 9% 13% CAGR CAGR $367 $1.7 $0.9 $195 2010 2015 2010 2015 Adjusted EPS Free Cash Flow ($M) 15% 20% CAGR $2.57 CAGR $321 $1.26 $131 2010 2015 2010 2015 © 2015 ResMed I 13
Slide 14: Robust capital management
Robust capital management Capital Deployment Free Cash Flow returned Increasing Dividend Investment for Growth to Shareholders FY 2015 dividend payout ratio New products FY 2015 combined dividend of 45% of net income and stock repurchase = 97% Geographic expansion 2015 dividend per share o
Slide 15: Where We're Going
WHO WE ARE WHY INVEST WHERE WE’RE GOING © 2015 ResMed I 15
Slide 16: ResMed's Three-Horizon Growth Strategy
ResMed’s Three-Horizon Growth Strategy Changing lives with every breath 20 million lives changed by 2020 Improve patient quality of life Prevent chronic disease progression Reduce healthcare system costs Horizon 3 Accelerate and Expand into New Markets Patient Growth • Respiratory monitoring solutio
Slide 17: The optimized delivery model with Air Solutions
The optimized delivery model with Air Solutions Payors Hospital EMR HME RDM Resupply OSA Referring Sleep Lab or Patient Physician Home Sleep Test Diagnosis Therapy Monitoring & Management Patient Engagement Billing © 2015 ResMed I 17
Slide 18: Proven HI Solutions builds competitive advantage
Proven HI Solutions builds competitive advantage The ability to predict outcomes, communicate insights and act on data effectively and efficiently keeps ResMed in a leadership position. © 2015 ResMed I 18
Slide 19: Air Solutions – Better Efficiency, Better Outcomes
Air Solutions – Better Efficiency, Better Outcomes • Outcomes - Reduced waiting times - Doubling of clinic capacity for assessments - 60% increase in capacity for set up appointments - 58% reduction in nurse time/cost • Total nurse time cost per patient in the old system £34.00 vs. £13.45 in the new
Slide 20: AirFit range – World-leading Patient Interfaces
AirFit range – World-leading Patient Interfaces 50% quieter & lighter Compact, user-friendly design Compact design Easy to fit Ease of use Visual freedom Ease of use; comfort Visual freedom Patients ranked #1 for Patients ranked #1 seal, comfort and ease of compared to industry u
Slide 21: We continue to build sleep apnea awareness
We continue to build sleep apnea awareness “Ignorance is our major competitor” • “Better Sleep for Women” education and product focused campaign • S+ by ResMed – consumer sleep management solution available online and retail; connected to Apple HealthKit © 2015 ResMed I 21
Slide 22: ResMed's Three-Horizon Growth Strategy
ResMed’s Three-Horizon Growth Strategy Changing lives with every breath 20 million lives changed by 2020 Improve patient quality of life Prevent chronic disease progression Reduce healthcare system costs Horizon 3 Accelerate and Expand into New Markets Patient Growth • Respiratory monitoring solutio
Slide 23: Horizon 2: Huge potential to improve outcomes in COPD
Horizon 2: Huge potential to improve outcomes in COPD • Mortality risk reduced by over 60% on a relative basis when using long-term non-invasive ventilation (NIV) 0.40 Control Group Intervention Group treatment in chronic obstructive p=0.0004 pulmonary disease (COPD) 0.30 Cumulative Mortality • One-
Slide 24: Our new respiratory care platform: Astral
Our new respiratory care platform: Astral ResMed introduces the Astral life support ventilator globally: Designed to enrich life for patients • Freedom: patient quality-of-life • Ease of use: saves clinician time • Low total cost of ownership: efficiency * The Astral™ platform is water resistant, bu
Slide 25: Horizon 2: Full spectrum of ventilation products
Horizon 2: Full spectrum of ventilation products Life Support Ventilation Non-invasive Ventilation (NIV) Product Features Astral™ Bilevel Lumis™ Stellar™ AirCurve 10 Patient Requirements © 2015 ResMed I 25
Slide 26: Horizon 2: Invest in a portfolio of key high growth markets
Horizon 2: Invest in a portfolio of key high growth markets China India Expand local presence Expand market through through infrastructure market access activity and expertise and clinical partnerships Brazil Poland Make additional investments to Czech accelerate growth Republic © 2015 ResMed I 26
Slide 27: High growth markets: Investing in China
High growth markets: Investing in China • Accelerating our strategy to invest and grow in China and other high growth markets • ResMed and Curative combined will be the leader in sleep and respiratory care in China • Complementary sleep and respiratory care products and Curative product manufacturin
Slide 28: ResMed's Three-Horizon Growth Strategy
ResMed’s Three-Horizon Growth Strategy Changing lives with every breath 20 million lives changed by 2020 Improve patient quality of life Prevent chronic disease progression Reduce healthcare system costs Horizon 3 Accelerate and Expand into New Markets Patient Growth • Respiratory monitoring solutio
Slide 29: Sleep apnea: Highly prevalent in key diseases
Sleep apnea: Highly prevalent in key diseases Stroke 63% Depression 45% Drug-Resistant Hypertension 83% Heart Failure 76% Coronary Artery Disease 57% Morbid Obesity 77% Atrial Fibrillation 49% Type 2 Diabetes 72% References: Logan et al. J. Hypertension; O’Keefe and Patterson, Obes Surgery; Oldenbur
Slide 30: Horizon 3: Atrial Fibrillation (AF)
Horizon 3: Atrial Fibrillation (AF) • Conclusion of study in JACC: ‒CPAP use associated with reduced AF recurrence ‒Reduced AF recurrence seen in two key groups • Patients who underwent catheter ablation • Patients who underwent non-ablation medical mgmt. ‒Data included 7 studies with n=1,087 patien
Slide 31: Horizon 3: Heart Failure
Horizon 3: Heart Failure Dose-response relationship between SDB and cardiovascular outcome • Goal: Clinical trial focused on treatment of • Status: Enrollment complete and continuing sleep disordered breathing in Heart the clinical trial as a pilot study to Failure inform future research © 2015 ResM
Slide 32: Horizon 3: Coronary Artery Disease (CAD)
Horizon 3: Coronary Artery Disease (CAD) • Conclusion of data from ATS ‒Results suggest CPAP reduces risk for adverse cardiovascular outcomes in revascularized patients with CAD and non-sleepy OSA ‒CPAP usage of at least 4 hours per night is crucial to achieve this risk reduction © 2015 ResMed I 32
Slide 33: Changing lives with every breath
Changing lives with every breath In the last 12 months, we changed more than 8 million lives, literally keeping patients breathing… and we are just getting started. Our aspiration is to change 20 million lives by 2020 © 2015 ResMed I 33
Slide 34: Why invest
Why invest Strong Portfolio Strong Performance Growth Drivers Broad range of Solid revenue growth Underpenetrated products & solutions track record global SDB market − Wireless, cloud- New adjacent markets Operational excellence in COPD, CAD & AF connected devices is part of our DNA − End-
Slide 35: Contact Investor Relations
Contact Investor Relations Phone: (858) 836-5971 Email: investorrelations@resmed.com Website: www.investors.resmed.com