Livanova Plc · NASDAQ:LIVN
Livanova — Q3 2021 Earnings Presentation
24 slides from Livanova's earnings presentation, November 2021
Slide 1: Charlotte, VNS Therapy Patient
Charlotte, VNS Therapy Patient 1
Slide 2: Safe Harbor
Safe Harbor Certain statements in this presentation, other than purely historical information, 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 Securities Exchange Act of 1934, as ame
Slide 3: Intellectual Property
Intellectual Property 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 (Pulse®), Model 102R (Pulse Duo®
Slide 4: Agenda
Agenda Financial Results 2021 Guidance Adjusted Free Cash Flow Summary 4
Slide 5: Financial Results
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Slide 6: Financial Summary
Financial Summary 3Q20 3Q21 Net Sales ($M) Adjusted Diluted EPS Heart Valves* • Net sales increased 5.0 percent on a constant-currency basis • Net sales, excluding sales related to the Heart Valves business that was divested effective June 1, 2021, increased 15.2 percent on a constant-currency basis
Slide 7: Net Sales
Net Sales $253.2M 5.0% increase* Vagus Nerve Stimulation Therapy (VNS Therapy) 89% Cardiopulmonary (CP) • Drug-Resistant Epilepsy (DRE) • Heart-lung machines (HLM) • Difficult-to-Treat Depression (DTD) • Oxygenators • Heart Failure (HF) • Autotransfusion systems (ATS) • Cardiovascular • Cannulae 45%
Slide 8: Cardiovascular Sales
Cardiovascular Sales Net Sales ($M)* (1.9)% Drivers/Impacts $140.9 $138.6 22.7% Strong growth in ACS driven by the continued adoption of LifeSPARC following full commercial launch in 3Q20 and an increase in procedure N/A volumes Oxygenator sales grew in the high teens globally, with growth across al
Slide 9: Neuromodulation Sales
Neuromodulation Sales Drivers/Impacts 14.6% Global sales increased 15% with double-digit growth occurring in all regions, reflecting the continued improvement in market dynamics U.S. sales increased 11% driven by replacement implants. Go-to-market commercial initiatives in select comprehensive epile
Slide 10: Adjusted Segment Operating Income and Margin
Adjusted Segment Operating Income and Margin(1) ($M) 3Q20 3Q21 $47.9 % to Sales 3Q20 3Q21 $32.1 Cardiovascular 5.9% 14.5% $45.7 Neuromodulation 32.4% 40.3% $31.9 Total 13.4% 18.9% $20.1 $8.2 $(8.0) $(17.9) Neuromodulation Cardiovascular Expenses Not Allocated to Segments(2) Numbers may not add preci
Slide 11: Adjusted EPS from Continuing Operations
Adjusted EPS from Continuing Operations* * Adjusted diluted EPS is a non-GAAP measure. This non-GAAP measure is reconciled to its GAAP measure in the appendix. 11
Slide 12: Net Sales Comparisons by Region
Net Sales Comparisons* by Region Cardiopulmonary & Neuromodulation Net Sales by Region - Three and Nine Months of 2021 versus 2019 Three Months Ended September 30, Nine Months Ended September 30, % Change % Change % Change % Change at Actual at Constant- at Actual at Constant- ($M) 2021 2019 Currenc
Slide 13: Adjusted Free Cash Flow
Adjusted Free Cash Flow Focused on strengthening adjusted FCF ▪ Targeting $55-75M of adjusted free cash flow for full-year 2021 Adjusted Free Cash Flow Reconciliation ($M) 1Q 2021 2Q 2021 3Q 2021 2021 YTD Net cash provided by operating activities $19.5 $25.6 $24.0 $69.1 Less: Purchases of plant, pro
Slide 14: 2021 Guidance
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Slide 15: 2021 Updated Guidance
2021 Updated Guidance Increasing full-year guidance as a result of nine month 2021 performance Guidance as of Guidance as of Guidance as of Guidance as of Guidance as of Feb. 24, 2021 Jun. 1, 2021 Jul. 28, 2021 Aug. 16, 2021 Nov. 3, 2021 Worldwide net sales growth (1) 8 - 13% 0 - 5% 5 - 10% 5 - 10%
Slide 16: 3Q 2021 Summary
3Q 2021 Summary While COVID-19 is still impacting some markets, we have confidence in our 2021 outlook • Solid 3Q sales results across all 3 regions despite continued variability across markets due to COVID-19 Financial • Gross margin improvement driven by favorable product and geographic mix • Stre
Slide 17: Positioning LivaNova to Realize its Full Value
Positioning LivaNova to Realize its Full Value Consistently deliver growth, pipeline and profitability Core Growth Focus on portfolio optimization to support leadership positions in underserved markets • Expand the go-to-market initiative for U.S. Epilepsy • Forecast over 30% ACS growth in 2021 Pipe
Slide 18: 2021 Assumptions
2021 Assumptions • Epilepsy surgeries expected to improve as pandemic subsides, resulting in 25-30% global growth REVENUE 8 - 11%* • LifeSPARC adoption expected to deliver over 30% ACS growth in 2021 • Cardiopulmonary expected to grow in the mid-single digits • Gross margin expected to improve led b
Slide 19: Appendix
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Slide 20: GAAP to Non-GAAP Reconciliation & Constant-Currency Comparison - Unaudited
GAAP to Non-GAAP Reconciliation & Constant-Currency Comparison - Unaudited $ in millions Three Months Ended September 30, Constant-Currency Business / Product Line: 2021 2020 % Change % Change* Cardiopulmonary $123.2 $107.2 15.0 % 14.5 % Heart Valves — 21.1 N/A N/A Advanced Circulatory Support 15.4
Slide 21: 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 Certain Legal, Depreciation and Contingent Stock-based Restructuring Amortization Financing Consideration Compensation C
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 Certain Legal, Merger and Depreciation and Product Contingent Stock-based Integration Restructuring Amortization Remedia
Slide 23: Segment Non-GAAP Reconciliation - Unaudited
Segment Non-GAAP Reconciliation - Unaudited (U.S. dollars in millions) Specified Items Certain Legal, Depreciation and Contingent Stock-based Amortization Consideration Compensation Three Months Ended GAAP Financial Expenses and Other Costs Heart Valves Adjusted September 30, 2021 Results (A) (B) (C
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations The preceding 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 2021 press release and during the conference call held in conjuncti