Livanova Plc · NASDAQ:LIVN
Livanova — Q2 2021 Earnings Presentation
25 slides from Livanova's earnings presentation, July 2021
Slide 1: Real patients treated with VNS Therapy
Real patients treated with VNS Therapy (Left to Right: Breanna; Candace; Jose, father of patient David) 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 Recent Activities & Highlights Financial Results Guidance Summary 4
Slide 5: Recent Activities & Highlights
Recent Activities & Highlights 5
Slide 6: Recent Activities & Highlights
Recent Activities & Highlights Meaningful execution and innovation strengthening our future Heart Valves • We completed the initial closing of our Heart Valve divestiture, including both manufacturing sites. Closings relating to the sales infrastructure in various geographies around the world will f
Slide 7: Financial Results
oe + a at at at a eetetete! oneee, eens icuaeaene iS ese seas, aoa iseaes! = -~\ LivaNove A
Slide 8: Financial Summary
Financial Summary 2Q20 2Q21 Net Sales ($M) Adjusted Diluted EPS Heart Valves* • Net sales increased 41.0 percent on a constant-currency basis $0.52 • Net sales, excluding sales related to the Heart Valves business that was divested effective June 1 as part of the initial transaction closing, increas
Slide 9: Net Sales
Net Sales $264.5M 41.0% increase* 81% Cardiopulmonary (CP) Vagus Nerve Stimulation Therapy • Heart-lung machines (HLM) (VNS Therapy) • Oxygenators • Autotransfusion systems (ATS) • Drug-Resistant Epilepsy (DRE) • Cannulae • Difficult-to-Treat Depression (DTD) • Heart Failure (HF) • Cardiovascular 55
Slide 10: Cardiovascular Sales
Cardiovascular Sales Net Sales ($M)* Drivers/Impacts 12.6% $145.9 Strong growth in ACS driven by the continued adoption of LifeSPARC $124.5 following full commercial launch in 3Q20 and an increase in procedure 120.3% volumes (21.5)% Oxygenator sales grew in the high teens globally, with sequential g
Slide 11: Neuromodulation Sales
Neuromodulation Sales Drivers/Impacts 102.4% Global sales increased 102% reflecting the continued improvement in market dynamics across all regions U.S. sales increased 108% driven mainly by replacements. Go-to-market commercial initiatives in select comprehensive epilepsy centers (CECs) trended abo
Slide 12: Adjusted Segment Operating Income and Margin
Adjusted Segment Operating Income and Margin(1) ($M) 2Q 2020 2Q 2021 $39.3 % to Sales 2Q 2020 2Q 2021 $48.1 Cardiovascular 0.9% 10.4% Neuromodulation 3.3% 40.9% $(4.2) $15.2 Total (2.3)% 14.9% $1.9 $1.9 $1.1 $1.1 $(7.2) $(7.2) $(24.0) Neuromodulation Cardiovascular Expenses Not Allocated to Segments
Slide 13: 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. 13
Slide 14: 2021 Guidance
oe + a at at at a eecetate: e5eae, eeeecenee tere eseten aoa oferta: = -~\ LivaNove A
Slide 15: 2021 Updated Guidance
2021 Updated Guidance Increasing full-year guidance as a result of 1H 2021 performance Guidance as of Guidance as of Guidance as of Feb. 24, 2021 Jun. 1, 2021 Jul. 28, 2021 Worldwide net sales growth (1) 8 - 13% 0 - 5% 5 - 10% Worldwide net sales growth, excluding Heart Valves (1) 7 - 12% 7 - 12% 12
Slide 16: 2Q 2021 Summary
2Q 2021 Summary While COVID-19 is still impacting some markets, we have higher confidence in our 2021 outlook • Solid 2Q sales results despite continued variability across markets due to COVID-19 Financial • Gross margin improvement driven by favorable product and geographic mix • SG&A leverage whil
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 at least 25% ACS growth in 2021
Slide 18: Adjusted Free Cash Flow
Adjusted Free Cash Flow Focused on strengthening adjusted FCF; continued recovery expected during the second half of the year ▪ Targeting $35-55M of adjusted free cash flow for full-year 2021 Adjusted Free Cash Flow Reconciliation ($M) 1Q 2021 2Q 2021 2021 YTD Net cash provided by operating activiti
Slide 19: Assumptions for 2021
Assumptions for 2021 • Epilepsy surgeries expected to improve as pandemic subsides, resulting in 25-30% global growth • LifeSPARC adoption expected to deliver at least 25% ACS growth in 2021 REVENUE 5 - 10%* • Cardiopulmonary expected to grow in the low-to-mid single digits, which includes the impac
Slide 20: Appendix
eeneneeeeenene, a ) EE eetetateteenee =A bX es
Slide 21: GAAP to Non-GAAP Reconciliation & Constant Currency Comparison
GAAP to Non-GAAP Reconciliation & Constant Currency Comparison - Unaudited $ in millions Three Months Ended June 30, Constant-Currency Business / Product Line: 2021 2020 % Change % Change* Cardiopulmonary $117.9 $101.1 16.6 % 12.1 % Heart Valves 14.7 17.5 (15.7)% (21.5)% Advanced Circulatory Support
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: 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 24: Segment Non-GAAP Reconciliation - Unaudited
Segment Non-GAAP Reconciliation - Unaudited (U.S. dollars in millions) Specified Items Certain Legal, Depreciation and Product Contingent Stock-based Amortization Remediation Consideration Compensation Three Months Ended GAAP Financial Expenses Expenses and Other Costs Heart Valves Adjusted June 30,
Slide 25: 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 second-quarter 2021 press release and during the conference call held in conjunct