Teleflex Incorporated · NYSE:TFX
Teleflex — Stephens Investment Conference 2020
50 slides from Teleflex's conference presentation, Nov 16, 2020
Slide 1: Teleflex Investor Presentation
Teleflex Investor Presentation 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation and our discussion contain forward-looking information and statements, which inherently involve risks and uncertainties that could cause actual results to differ from those projected or implied in the forward–looking statements. These statements involve k
Slide 3: Making a Difference
Making a Difference Teleflex products are used everyday: 31,000 1,600 In 31,000 surgical procedures To help more than 1,600 patients who in the United States require vascular access intervention globally 6,000 3,200 To care for more than 6,000 By emergency responders to treat patients globally in th
Slide 4: Demographics and Industry Trends in Our Favor
Demographics and Industry Trends in Our Favor 10,000People turn 65 in the U.S. everyday1 Lower acuity patients moving to lower cost 1.1B People 50+ sites of service in Asia by 20252 1. Pew Research Center: http://www.pewresearch.org/fact-tank/2010/12/29/baby-boomers-retire/ 4 2. APACMed: http://www.
Slide 5: Teleflex Investment Thesis
Teleflex Investment Thesis Global • Leading positions in growing markets (vascular, interventional access, interventional urology) Leadership • Established and respected global brands • Global scale to succeed in today’s healthcare marketplace Unique Size • More nimble than larger device companies •
Slide 6: Segment Revenue Review
Segment Revenue Review As- Constant Dollars FY’19 FY’18 Reported Currency Currency in Millions Revenue Revenue Revenue Impact Growth Growth Americas $1,492.3 $1,351.7 10.4% (0.2%) 10.6% EMEA $588.1 $603.8 (2.6%) (5.3%) 2.7% Asia $294.3 $286.9 2.6% (4.2%) 6.8% OEM $220.7 $206.0 7.2% (1.0%) 8.2% TOTAL
Slide 7: Global Product Category Revenue Review
Global Product Category Revenue Review As- Constant Dollars FY’19 FY’18 Reported Currency Currency in Millions Revenue Revenue Revenue Impact Growth Growth Vascular Access $600.9 $575.3 4.4% (1.9%) 6.3% Interventional $427.6 $395.4 8.1% (1.7%) 9.8% Anesthesia $338.4 $349.4 (3.1%) (2.6%) (0.5%) Surgi
Slide 8: Constant Currency Revenue Growth
Constant Currency Revenue Growth (in millions) $2,595 8.1% $2,550 $2,448 Constant $2,350 currency $2,146 revenue $2,150 growth in $1,950 $1,868 2019 $1,840 $1,810 $1,750 $1,696 $1,551 $1,550 $1,493 $1,350 $1,150 $950 $750 2011 2012 2013 2014 2015 2016 2017 2018 2019 8 Bar chart depicts as reported t
Slide 9: Track Record of Adjusted Operating Margin Expansion
Track Record of Adjusted Operating Margin Expansion Adjusted Operating Margin +10 bps +100 bps +60 bps +260 bps 25.1% 25.7% 25.8% +150 bps 24.1% 21.5% 20.0% 2014 2015 2016 2017 2018 2019 9 Note: Figures represent adjusted operating margin. See Appendices for reconciliation of non-GAAP financial meas
Slide 10: Q3'20 Segment Revenue Review
Q3'20 Segment Revenue Review Constant Estimated Q3'20 Q3'19 Reported Currency Dollars in Millions Impact Currency COVID-19 Revenue Revenue Revenue Growth Growth Impact Americas $375.0 $374.5 0.1% (0.3)% 0.4% (~9%) EMEA $135.7 $140.5 (3.5)% 3.5% (7.0)% (~4%) Asia $68.2 $77.9 (12.4)% 1.8% (14.2)% (~21
Slide 11: Q3'20 Global Product Category Revenue Review
Q3'20 Global Product Category Revenue Review Constant Estimated Dollars in Q3'20 Q3'19 Reported Currency Impact Currency COVID-19 Millions Revenue Revenue Revenue Growth Growth Impact Vascular Access $160.0 $148.7 7.6% 0.8% 6.8% ~1% Interventional $93.2 $106.9 (12.8)% 0.7% (13.5)% (~16%) Anesthesia
Slide 12: Core Strategic Building Blocks
Core Strategic Building Blocks Teleflex is a Differentiated Med Tech Asset Drive Constant Deliver Non-Revenue Continue to be a Align Portfolio Continue to Attract Currency Dependent Margin Serial Acquirer with Favorable Key Talent Revenue Growth Expansion Demographics • Address major • Execute restr
Slide 13: Teleflex 2021: Growth Drivers
Teleflex 2021: 3 Year Growth Drivers High growth company with gross and operating margin expansion Execute Leverage strategic global M&A Drive infrastructure Medium Continued utilization Invest in cadence in growth growth key disease of new product company states product categories with gross and la
Slide 14: Invest in Key Disease States and Markets
Invest in Key Disease States and Markets Catheter complications Drive utilization Interventional procedures Drive utilization/ grow market share Percutaneous laparoscopy Grow market share Anesthesia and emergency medicine Drive utilization Men’s health Drive utilization 14
Slide 15: Drive Utilization in Growth Product Categories
Drive Utilization in Growth Product Categories Current Portfolio Interventional Vascular Airway Urology Intraosseous Access Access Management Interventional Cardiology The UroLift® EZ-IO® OnControl® Rüsch® Polaris™ Fiber Chocolate® MANTA™ Intraosseous Vascular Powered PICCS Optic Single-Use Turnpike
Slide 16: Leverage Global Infrastructure
Leverage Global Infrastructure Strategies • Realize margin expansion through ongoing restructuring initiatives • Leverage recent go-directs to strengthen control of commercial channels in Europe and Asia • Drive adoption of high margin products in new markets ORANGE: Americas BLUE: Europe, Middle Ea
Slide 17: Execute Disciplined M&A Strategy
Execute Disciplined M&A Strategy Acquisition Criteria M&A Focus • Fits existing business units and call points 1 Scale • Provides superior clinical benefit to existing alternatives • Provides cost-benefit to the hospital 2 Dealer to direct • Strong IP and patent protection • Long product life cycles
Slide 18: Track Record of Value Creating Acquisitions
Track Record of Value Creating Acquisitions Mini-Lap Truphatek Ace Medical Nostix, LLC CarTika Vascular QT Vascular Technologies, Holdings US, LLC Medical, Inc. Solutions, Inc. Inc. Limited Mayo 2014 2015 2015 2015 2016 2017 2018 Healthcare Pty. Ltd. 2014 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 Vidacare Human Medic
Slide 19: Acquisition Update
Acquisition Update Signs Agreement to Acquire Z-Medica, LLC KEY TAKEAWAYS Market Leader in hemostatic products for the pre-hospital and military markets • The QuikClot® family of products contain kaolin, which has been shown to accelerate the clotting cascade and stop bleeding fast; portfolio provid
Slide 20: 2020 Workforce Reduction Plan Announced
2020 Workforce Reduction Plan Announced • During the second quarter of 2020, we committed to a workforce reduction designed to improve profitability and reduce cost primarily by streamlining certain sales and marketing functions in our EMEA segment and certain manufacturing operations in our OEM seg
Slide 21: Key Investment Highlights
Key Investment Highlights Diversified, global medical technology company Well-positioned to take advantage of favorable industry dynamics Leading market positions with established global brands Diversified customer and supplier base Strong cash flow generation and proven history of deleveraging and
Slide 22: Thank You
22 Veleflex:
Slide 23: Appendix A: Key Products
23 Appendix A: Key Products 23
Slide 24: NeoTract: A Compelling Growth Asset
NeoTract: A Compelling Growth Asset Significant Market • Initial target market 8.5M U.S. BPH drug or drug drop out patients; Opportunity >$30B total addressable market • 2 randomized controlled trials; 7 single arm studies Exceptional • >25 peer-reviewed publications Clinical Data • 5 year follow-up
Slide 25: 8.5 Million $30B TAM
Very Large Clinical Need and Market Opportunity 0.3 Surgery Drug drop out 1.5 8.5 Million Men on drugs or drug drop out UroLift® System target market Drugs 7.0 $30B TAM Watchful waiting 3.2 12.0 Million U.S. men treated for BPH1 #Men (millions) 25 1. NeoTract internal market estimates for 2016
Slide 26: Simple, Straightforward Procedure
Simple, Straightforward Procedure Nitinol Capsular Tab Apply Lidocaine Gently push Relieve obstruction PET Suture jelly/oral sedative^ tissue aside Typically same Insert delivery system Deploy customized implants day discharge Stainless Steel Urethral End Piece (4-6 Avg) 26 ^ This does not account f
Slide 27: UroLift 2
UroLift 2 One implant per cartridge UroLift Implant design remains the same 27
Slide 28: Reducing Tradeoffs Between Effectiveness and Risk Compared to Drugs
Reducing Tradeoffs Between Effectiveness and Risk Compared to Drugs Time to First Evidence of Symptom Improvement Incidence of Sexual Dysfunction^5,7 Statistically Significant at 10-16 Months5,6,7 Relief (Weeks)1,2,3,4,5 Mean AUASI Reduction Ejaculatory Dysfunction Erectile Dysfunction 12- 10.8 0%-
Slide 29: Clinical and Commercial Updates
Clinical and Commercial Updates Interventional Urology - UroLift® System KEY TAKEAWAYS Pilot National DTC Campaign Building Momentum • Began in early July 2020; in September advertising ramped to 100% • On pace to generate 6x the number of impressions of regional DTC campaigns over same time period
Slide 30: Anesthesia and Emergency Medicine: Arrow EZ-IO
Anesthesia and Emergency Medicine: Arrow® EZ-IO® Intraosseous Vascular Access Device Top Market Trends • >137 million visits to the emergency room in the U.S. annually1 • There are >500,000 adult occurrences of cardiac arrest yearly in the US with an estimated 10% survival rate2 • Sepsis kills a pat
Slide 31: Anesthesia/Emergency Medicine: EZ-PLAZ Freeze-Dried Plasma
Anesthesia/Emergency Medicine: EZ-PLAZ® FreezeDried Plasma EZ-PLAZ® FreezeDried Plasma Top Market Trends • >137 million visits to the emergency room in the U.S. annually1 • Minimal plasma availability in challenging environments (e.g. prehospital, remote/rural, battlefield settings), despite demand
Slide 32: EZ-PLAZ Freeze-Dried Plasma Market
EZ-PLAZ® FreezeDried Plasma Market Market Size Estimate Government ~$20M - Total market size $25M Civilian* $ ~$100M ~$70M - $75M Source: Management estimates *Does not include civilian trauma hospitals EZ-PLAZ is not approved for sale or distribution 32
Slide 33: Interventional Procedures
Interventional Procedures Top Market Trends TrapLiner® Catheter • Coronary artery disease is the most common type of heart disease in the US – cause of more than 370,000 deaths annually1 • Over 1 million percutaneous coronary interventions (PCI) are performed in the US every year2 • Approximately 8.
Slide 34: ARROW OnControl Powered Bone Access System
ARROW® OnControl® Powered Bone Access System Powered bone marrow biopsy device vs. ~$160M manual biopsy devices: • Consistently larger, high quality core specimens1-4 On-Control® Total Potential • Demonstrated less patient insertion pain2 and Addressable U.S. Market1 significantly less post-procedur
Slide 35: OnControl System Significant Utilization Opportunity
OnControl® System Significant Utilization Opportunity OnControl® System North America Utilization per Account Strategies to Drive Utilization: • Invest in professional education 20+ kits/month 11% Leaders and cadaver training 10-18 kits/month 14% Regulars • Leverage larger interventional sales chann
Slide 36: Arrow AC3 Optimus Intra-Aortic Balloon Pump
Arrow® AC3 Optimus® Intra-Aortic Balloon Pump Advanced IABP performance even in the most critical conditions • With the onset of an elevated heart rate or arrhythmia, the patient’s survival can suddenly depend on the ability of the IABP to keep pace with the situation • The AC3 Optimus® intra-aortic
Slide 37: Turnpike Catheters
Turnpike® Catheters Turnpike® Spiral Catheter Distal nylon coil provides rotational assistance for enhanced trackability Turnpike® Gold Catheter Gold-plated, threaded metallic tip for enhanced advancement Turnpike® LP Catheter Low-profile version with greater tip and distal shaft flexibility for adv
Slide 38: TrapLiner Catheter
TrapLiner® Catheter Guide Extension Plus Wire Trapping • Balloon inflates to maintain Balloon inflates via a guidewire position hypotube push rod to trap, the guidewire against the • Rapid exchange guide interior wall of the guide extension for backup catheter support and deep-seating • Gold radiopa
Slide 39: Percutaneous Laparoscopy
Percutaneous Laparoscopy Percutaneous Access Devices Top Market Trends • 3.5 million laparoscopic procedures performed in the US Annually1 • Patient and clinician demand for decreased trauma and enhanced safety • Patient satisfaction influence on reimbursement • Shifts to outcome based medicine Grow
Slide 40: Creating a Suite of Minimally Invasive Surgical Products
Creating a Suite of Minimally Invasive Surgical Products Weck® Hem-o-lok® Polymer Ligation Systems Pilling® Laparoscopic Instruments Weck Vista® Bladeless Laparoscopic Access Ports 40
Slide 41: Weck Hem-o-lok Polymer Ligation Systems
Weck® Hem-o-lok® Polymer Ligation Systems Product Description Weck Hem-o-lok® polymer ligation clips are designed for cool ligation, lasting security and fast, efficient delivery – secure from the cartridge to the applier and on the vessel. The Weck Hem-o-lok polymer ligation system unique design of
Slide 42: Catheter Complications: Antimicrobial Technology
Catheter Complications: Antimicrobial Technology Top Market Trends • Pressures on healthcare funding linked to patient outcomes • Increasing awareness of infection and thrombosis Protected Catheters driving penalties and therapy costs • Increasing awareness of CLABSI issues with PICC lines Growth St
Slide 43: Arrowg+ard Blue Advance PICC
Arrowg+ard Blue Advance™ PICC Product Description Pressure-injectable Arrowg+ard Blue Advance™ PICCs with Chlorag+ard® Technology are the world’s first PICCs in the intravascular catheter marketplace with both broad-spectrum antimicrobial and antithrombogenic protection. Extra- and intraluminal prot
Slide 44: Appendix B: GAAP to Non-GAAP Reconciliations
44 Appendix B: GAAP to Non-GAAP Reconciliations 44
Slide 45: Note on Non-GAAP Financial Measures
Note on 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 gro
Slide 46: 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 47: Reconciliation of Adjusted Operating Profit and Margin
Appendix A – Reconciliation of Adjusted Operating Profit and Margin Dollars in Thousands Tw elve Months Ended Decem ber 31, 2014 Decem ber 31, 2015 Decem ber 31, 2016 Decem ber 31, 2017 Decem ber 31, 2018 Decem ber 31, 2019 Incom e from continuing operations before interest, loss on extinguishm ent
Slide 48: Reconciliation of Adjusted Earnings per Share
Appendix B – Reconciliation of Adjusted Earnings per Share Twelve Months Ended December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 2015 - 2019 CAGR GAAP diluted earnings per share available to common shareholders $4.91 $4.98 $3.33 $4.20 $9.81 18.9% GAAP year-ove
Slide 49: Appendix C Tickmarks
Appendix C Tickmarks (A) Restructuring, restructuring related and impairment items - In 2015 the majority of these charges were related to facility consolidations. In 2016, these charges include; (i) charges related to facility consolidations, (ii) a pre-tax, non-cash $41.0 million impairment charge
Slide 50: Restructuring and Similar Cost Savings Initiatives Summary
Appendix D – Restructuring and Similar Cost Savings Initiatives Summary During the second quarter of 2020, we committed to a workforce reduction designed to improve profitability and reduce cost primarily by streamlining certain sales and marketing functions in our EMEA segment and certain manufactu