Livanova Plc · NASDAQ:LIVN
Livanova — Q3 2022 Earnings Presentation
28 slides from Livanova's earnings presentation, Nov 2, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
LivaNova Health innovation that matters Third Quarter 2022 Earnings Presentation November 2, 2022
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 of 1933 and Section 21E of the Securities Exchange Act of 1934
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 Du
Slide 4: Agenda
Agenda 3Q22 Financial Results 2022 Outlook Appendix 4
Slide 5: Financial Results
Financial Results Financial Results 5
Slide 6: 3Q22 Financial Summary
3Q22 Financial Summary 3Q21 3Q22 Net Revenue ($M) Adjusted Diluted EPS et Sales ($ in MM) Adjusted Diluted EPS $253.2 $252.6 $0.66 $0.58 • Net revenue increased 5.2 percent on a constant-currency basis • Foreign currency had an unfavorable impact on net revenue of ~$14M, or 5 percent Adjusted Gross
Slide 7: 3Q22 Net Revenue
3Q22 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) 48% $252.6M 48% • Heart Failure (HF) 5.2% inc
Slide 8: Segment Net Revenue Comparisons by Region
Segment Net Revenue Comparisons* by Region Three Months Ended September 30, % Change % Change at Actual at Constant- ($M) 2022 2021 Currency Rates Currency Rates Cardiopulmonary United States $38.5 $40.1 (4.2)% (4.2)% Europe(1) 28.8 32.9 (12.5)% 2.8% Rest of World 53.7 50.2 6.9% 17.7% Total 121.0 12
Slide 9: 3Q22 Cardiopulmonary Revenue
3Q22 Cardiopulmonary Revenue Drivers/Impacts Net Revenue ($M)* 6.6% $123.2 $121.0 Revenue increased 7%, driven by the Rest of World and Europe regions, reflecting an increase in cardiac surgery procedures and capital placements. $50.2 $53.7 Oxygenator revenue grew in the high-single-digits, driven b
Slide 10: 3Q22 Neuromodulation Revenue
3Q22 Neuromodulation Revenue Drivers/Impacts Net Revenue ($M)* 10.4% $121.8 $113.3 $14.2 Neuromodulation revenue increased 10%, with growth across all $12.0 regions reflecting improved market dynamics. $11.1 $12.5 U.S. Epilepsy revenue grew 9% year-over-year. Go-to-market commercial initiatives in c
Slide 11: 3Q22 Advanced Circulatory Support Revenue
3Q22 Advanced Circulatory Support Revenue Drivers/Impacts Net Revenue ($M)* (43.8)% $15.4 ACS revenue declined 44%, impacted primarily by a reduction in severe COVID cases versus the prior year and product mix. ACS case volumes related to COVID-19 declined significantly $8.6 year-over-year as fewer
Slide 12: 3Q22 Adjusted Segment Operating Income and Margin
3Q22 Adjusted Segment Operating Income and Margin(1) $46.5M % to Revenue $36.6M 3Q21 3Q22 $45.7 Cardiopulmonary 13.2% 11.7% $41.9 Neuromodulation 40.4% 34.4% ACS 15.2% (79.1)% $16.3 $14.1 $2.3 Total 18.4% 14.5% $(6.8) $(17.9) $(12.6) Cardiopulmonary Neuromodulation 3Q 2021 3Q 2022 ACS Other(2) Numbe
Slide 13: 3Q22 Adjusted EPS from Continuing Operations
3Q22 Adjusted EPS from Continuing Operations* $2.40 $0.58 $0.20 $0.44 $0.17 $(0.11) $(0.01) $(0.70) $0.11 $0.08 $(2.01) GAAP Restructuring Depreciation and Impairment Financing Certain Legal Contingent Stock-based Certain Tax Certain Interest Adjusted Financial Expenses Amortization Transactions and
Slide 14: Adjusted Free Cash Flow
Adjusted Free Cash Flow Continued focus on optimizing cash generation • Targeting $60M - $80M of adjusted free cash flow (FCF) for full-year 2022 Adjusted Free Cash Flow Reconciliation ($M) 1Q 2022 2Q 2022 3Q 2022 2022 YTD Net cash provided by operating activities $25.8 $(10.2) $35.6 $51.2 Less: Pur
Slide 15: 3Q 2022 Summary
3Q 2022 Summary • 5.2% revenue growth, with strength in Neuromodulation and Cardiopulmonary Financial • Adjusted operating margin unfavorably impacted by prior year comparison in SG&A and R&D • Adjusted free cash flow of $41M enhanced by working capital management • U.S. Epilepsy delivered sequentia
Slide 16: 2022 Outlook
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Slide 17: 2022 Outlook
2022 Outlook Reaffirming guidance Consolidated Guidance Consolidated Guidance As of February 23, 2022 As of August 3, 2022 Worldwide net revenue growth, excluding Heart Valves(1)(2) 3 - 5% 4 - 6% Adjusted diluted EPS(1)(3) $2.50 - 2.80 $2.25 - 2.45 Adjusted free cash flow(4) $90 - 110M $60 - 80M Wor
Slide 18: Assumptions for 2022
Assumptions for 2022 • Cardiopulmonary revenue now expected to grow 8-10% REVENUE 4 - 6%* • Epilepsy revenue now expected to grow 6-8% with new patient implants in the U.S. up sequentially in 4Q • ACS revenue now expected to decline 30% • Gross margin adversely impacted by inflation, foreign currenc
Slide 19: Our Strategic Priorities
Our Strategic Priorities Core Growth Focus on portfolio optimization to support leadership positions in underserved markets • Leverage the go-to-market initiative for U.S. Epilepsy • Continued market development for ACS Pipeline Execution Multiple existing and pipeline initiatives to accelerate grow
Slide 20: Appendix
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Slide 21: 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 2022 press release and during the conference call held in conjuncti
Slide 22: Net Revenue - Comparison of Actual Results to Constant Currency
Net Revenue - Comparison of Actual Results to Constant Currency - Unaudited Three Months Ended September 30, Constant-Currency 2022 2021 % Change % Change Cardiopulmonary $121.0 $123.2 (1.8%) 6.6% Neuromodulation 121.8 113.3 7.5% 10.4% Advanced Circulatory Support 8.6 15.4 (43.9%) (43.8%) Other 1.2
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 Depreciation and Certain Legal & Stock-based Restructuring Amortization Financing Contingent Regulatory Compensation Cer
Slide 25: 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 26: 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 & Regulatory Depreciation Costs, and Merger and and Product Investment Stock-based Certain GAAP Integratio
Slide 27: 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 28: 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 Impairment Adjusted September 30, 2022 Financial Results (A) (B) (C) (