Livongo Health — Merger or Acquisition (September 2020)
36 slides from Livongo Health's merger presentation, Sep 3, 2020
Slide 1: Transforming Healthcare, Across the Continuum of Care
Transforming Healthcare, Across the Continuum of Care September 2020 Q:\Corporate Preparedness Projects\Teladoc\2020\2020.08 Deck 2.0\2020.08.16 TDOC 2.0 Deck Outline v2.pptx Time Stamp : 9 March 2017 10:42:26
Slide 2: Teladoc Health + Livongo: a Compelling Combination
Teladoc Health + Livongo: a Compelling Combination Creates the global leader in virtual care across primary, ambulatory, acute, complex and chronic care Positions combined company to lead the market and set the pace for a rapidly evolving healthcare industry Establishes a consumer-centric, whole-per
Slide 3: Teladoc Health Has a Track Record of Value Creation
Teladoc Health Has a Track Record of Value Creation Teladoc Health’s acquired companies are actively selling into its legacy client base, and every major product we have developed is selling into acquired companies’ legacy client bases Teladoc Health Annual Revenue (in Millions) $77 $123 $233 $418 $
Slide 4: Execution of Teladoc Health's Strategic Vision Since IPO
Execution of Teladoc Health’s Strategic Vision Since IPO Clinical Service Distribution Channel Product Enhancement New International Markets Clinical Scope Distribution & Markets IPO 2015 Dermatology Hospital & Health System Text-based Mental Health DTC 2017 Caregiver Expert Medical Services Device
Slide 5: Teladoc Health's Industry-Leading Differentiated Assets & Capabilities at Scale
Teladoc Health’s Industry-Leading Differentiated Assets & Capabilities at Scale Member engagement Multi-specialty physician networks Global distribution channels Tech-enabled ops at scale Data & analytics Scale-driven ROI Comprehensive product offering Clinical quality
Slide 6: Livongo's Highly Differentiated AI + AI Offerings Power Its Platform
Livongo’s Highly Differentiated AI + AI Offerings Power Its Platform Uses technology to transform the experience of living with a chronic condition Creates a consumer-first, data-driven digital health experience that is easy to use and puts the consumer in charge Translates its deep consumer data in
Slide 7: Livongo's Data-Driven Insights Enable Better Outcomes
Livongo’s Data-Driven Insights Enable Better Outcomes… Strategic Rationale 1 55% Improvement in DASS Behavioral Health Diabetes Hypertension Weight Management 0.8pts Lower HbA1c 7.3% Avg weight loss 10mmHg Lower Systolic BP Unique model of care that leverages digital, self-management capabilities th
Slide 8: Delivering Proven ROI at Scale and Creating Value for Stakeholders
…Delivering Proven ROI at Scale and Creating Value for Stakeholders Average Member Net Promoter Score (NPS)1 +64 125% 2Q20 YoY Revenue Growth 113% 2Q20 YoY Growth in Diabetes Members Client Retention Rate1 94% 75% 2Q20 YoY Client Growth $109M Record EVA in 2Q20 $1,908 Per Participant per Year Gross
Slide 9: The Combined Company Meets an Unprecedented Market Opportunity
The Combined Company Meets an Unprecedented Market Opportunity… We are Creating an Entirely New Category of Whole-Person Virtual Care at a Time When the World Needs and Demands It 1B+ virtual care visits are expected to occur in 20201 $250B+ of current U.S. healthcare spend could be virtualized2 38%
Slide 10: And Addresses Accelerated Demand for Virtual Care
For Consumers 76% now interested in using virtual care, as compared to 11% prior to COVID-191 33% would leave current physician for a provider who offered telehealth access2 Nearly 2/3 want virtual care doctor to partner with existing in-person doctor3 For Payors / Employers 80% of large employers b
Slide 11: Livongo Accelerates and Amplifies Teladoc Health's Key Growth Strategies
Livongo Accelerates and Amplifies Teladoc Health’s Key Growth Strategies… Expand footprint and distribution Clinical services innovation Accelerate consumer adoption Broaden role in healthcare delivery = STRATEGIES ENHANCED BY LIVONGO Existing distribution channels Product cross-sell/upsell Governme
Slide 12: Creating the Leader in Virtual Care
…Creating the Leader in Virtual Care The Combined Company Will Be a Compelling Partner for Clients During an Unprecedented Market Moment in a Rapidly Evolving Industry 60 Of top 100 hospitals and health systems using Teladoc and Livongo solutions 750M Livongo digital interactions by the end of 2Q20
Slide 13: Together, Teladoc Health and Livongo Deliver Substantial Value for Shareholders
Together, Teladoc Health and Livongo Deliver Substantial Value for Shareholders 40% – 45% Pre-Synergy YoY Revenue Growth in 2021 30% – 40% Pre-Synergy ’20 – ’23 Revenue CAGR 15% – 18% Pre-Synergy Adj. EBITDA Margin by 2023 200 – 300bps Annual Expansion $100M Run-rate Revenue Synergies by 2022 $500M
Slide 14: $121B Combined U.S. TAM for Teladoc Health + Livongo
$121B Combined U.S. TAM for Teladoc Health + Livongo 1.25B annual visits1 33% treatable via telemedicine2 $~50 average visit fee 216M annual visits4 80% treatable via telemedicine2 $~90 average visit fee3 5.1M annual incidence5 $~5,500 case rate6 1M U.S. physician care teams7 $~125/month8 + 1.5M end
Slide 15: Empowering Whole-Person Care as a Comprehensive Partner with the Patient and Health System
Empowering Whole-Person Care as a Comprehensive Partner with the Patient and Health System Full Spectrum of Health Care Coordination Navigate across both virtual and in-person resources, ensuring access to high-quality care throughout Complex Care Gain advice on diagnosis, treatment plan, or surgery
Slide 16: Delivering Whole-Person Care for Better Health and Cost Outcomes
Delivering Whole-Person Care for Better Health and Cost Outcomes CLAIRE’S HEALTH JOURNEY Living with Hypertension Using connected blood pressure monitor and cuff, Claire and her care team monitor her hypertension Annual exam with Teladoc primary care physician; discusses medical history, nutrition a
Slide 17: Powering the Physician of the Future with Information and Insights
Powering the Physician of the Future with Information and Insights Easy to navigate user interface Real-time biometrics Data-driven recommendations Together, Teladoc Health and Livongo aim to help providers be informed in real-time, better prepared, and more consumer-centric to deliver better care,
Slide 18: Competitive Differentiation Creates First Integrated Virtual Delivery System
Market leading distribution and position Proven total-cost-of-care impact, with demonstrated quality and outcomes Leading consumer engagement and marketing approaches Scalable, technology-enabled platform Largest virtual care delivery network across 450+ specialties Global reach, with customers in 1
Slide 19: Combining Teladoc's Data Breadth and Livongo's Insights to Drive Results
Combining Teladoc’s Data Breadth and Livongo’s Insights to Drive Results Teladoc Health + Livongo Unmatched combination of scale and insights, driving better experiences and results for individuals: Better engagement (right place, time, modality) N=1 experiences and recommendations Unique client ins
Slide 20: Substantial Revenue and Cost Synergy Opportunities
Substantial Revenue and Cost Synergy Opportunities OpEx Reduction Reduce run-rate costs by combining the two entities $60M in annual OpEx synergies by 2022 $500M in annual revenue synergies by 2025 ~55% Cross-sell ~25% Referrals ~20% International sales Cross-Sell of Existing Products Sell Teladoc a
Slide 21: Cross-Sell Synergies: Keys to Success
Cross-Sell Synergies: Keys to Success How We Help Each Other Teladoc brings a large, diverse customer base including channels into SMB, MMC, and HHS (care delivery) markets Livongo adds complementary client relationships with Fortune 500 buyers and channel partners Together, Livongo and Teladoc offe
Slide 22: Cross-Sell Synergies: Path to Realization
Cross-Sell Synergies: Path to Realization Cross-selling through existing reseller agreement between Teladoc and Livongo Intense integration planning to develop best-in-front approach for strategic relationships, joint-marketing materials, and sales education Teladoc and Livongo are separate companie
Slide 23: Referral Synergies: Keys to Success
Referral Synergies: Keys to Success Teladoc brings its existing base (and the millions of interactions it drives) as a foundation for referrals into Livongo products Teladoc brings an extensive general medicine and specialist provider network that can provide clinical guidance, decision-making, and
Slide 24: Referral Synergies: Path to Realization
Referral Synergies: Path to Realization Teladoc Health Livongo Both Umar “I feel stressed and anxious and I don’t know why, or how to stop it.” Asks for help managing stress during virtual PCP appointment Provider suggests behavioral health support, sets up a therapist visit Pre-visit, receives a nu
Slide 25: International Synergies: Keys to Success
International Synergies: Keys to Success Teladoc brings deep international sales relationships driving 16% of LTM revenue, focused on markets with high-demand for best-in-class, innovative tech solutions Teladoc brings local knowledge and supporting infrastructure to address international regulatory
Slide 26: International Synergies: Path to Realization
International Synergies: Path to Realization Australia & Canada Expand in large English-speaking markets with existing Teladoc sales channels and relationships Europe Leverage Teladoc sales relationships and existing compliance infrastructure to accelerate market entry Southeast Asia Target English-
Slide 27: Significant Additional Synergies Using Integrated Capabilities
Significant Additional Synergies Using Integrated Capabilities SOURCES: IBM® MarketScan® Commercial Database; Commonwealth Fund; Health Affairs Next-Gen Specialist Care Virtual Primary Care 2.0 Hospital-at-Home Combine medical specialty and chronic condition services to expand offerings and cover ne
Slide 28: Disciplined Integration Approach
Disciplined Integration Approach Confident in ability to execute a multi-faceted integration plan: Undergoing a rigorous planning process Leveraging lessons learned and best practices from many previous integrations Building on a strong foundation of complementary cultures and shared values People D
Slide 29: Strong ESG Profile
Strong ESG Profile Empowering more people to live better and healthier lives Making meaningful progress on addressing long-standing disparities as chronic conditions disproportionately impact underserved communities Telemedicine combined with the increase in remote monitoring devices promise real st
Slide 30: Creating Value for All Stakeholders
Creating Value for All Stakeholders Delivers significant financial benefits and value creation for shareholders through substantial revenue synergy opportunities and cost savings Provides consumers with a single access point for whole-person care regardless of clinical situation, driving better heal
Slide 31: Use of Projections
Use of Projections This presentation includes unaudited financial projections for both Teladoc Health and Livongo with respect to revenue, adjusted gross profit and adjusted EBITDA. Neither Teladoc Health’s independent registered public accounting firm, nor any other independent accountants, have au
Slide 32: Certain Disclaimers
Certain Disclaimers Cautionary Note Regarding Forward-Looking Statements This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchang
Slide 33: Endnotes
Endnotes Page 7 1. Demonstrated at Fortune Brands after their Members spent 2 years enrolled in the Livongo for Diabetes solution over a 6-week period in individuals with BP of at least 140/80 in a peer-reviewed study prepared by Livongo and presented to the American College of Cardiology in April 2
Slide 34: Endnotes
Endnotes Page 21 Example synergy calculation approach includes cross-sell of Livongo products into Teladoc only and does not account for the full ~55% of 2025 revenue synergy value attributed to the overall cross-sell opportunity described on page 20. Does not include cross-sell of Teladoc products
Slide 35: Appendix
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Slide 36: Summary Financial Forecast Pre-Synergies (Prepared in Connection with Merger)
Summary Financial Forecast Pre-Synergies (Prepared in Connection with Merger) Source: Preliminary S-4 filed on September 3, 2020. While Teladoc provides limited near-term guidance each quarter, Teladoc does not, as a matter of course, publicly disclose forecasts or projections as to future performan
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